Mark Feldstein & Associates

Mr. Daniel Brown pleaded guilty to two counts of tax evasion in the Ontario Court of Justice in Kitchener this past May.  As well as paying the outstanding taxes, interest and any civil penalties determined by the Canada Revenue Agency (CRA), Mr. Brown must now also pay a fine in the amount of $27,010.

The failure to report income in the amount of $226,185 on his personal income tax returns for the 2005 and 2006 taxation years was deliberate.  The federal income tax Mr. Brown tried to avoid paying amounted to $23,800.  There was also an attempt to avoid paying $15,034 in GST for the same period.

The tax evasion was discovered when the CRA carried out a routine audit of an electrical contractor based in Kitchener.  The electrical contractor received 308 invoices from Brown and paid him by money order, bank draft or cash.  In spite of the fact that the invoices included GST of $15,034, Brown did not file GST returns for 2005 and 2006.

While a conviction of tax evasion carries a fine, the taxpayer must still pay the taxes owing, plus interest and any penalties assessed by the CRA.  The CRA is allowed to assess a penalty of up to 50% of the unpaid tax or the improperly claimed benefit in cases of gross negligence.  A fine of 50% to 200% of the tax evaded can be imposed by the Court on summary conviction.  The court may also sentence those  convicted of tax evasion to a jail term of up to two years.

The Voluntary Disclosures Program allows individuals and/or corporations who have outstanding tax returns or who have neglected to report all of their income to correct their tax situation.  Provided the returns are filed and the income is reported prior to the CRA initiating action, the taxpayer will not be penalized or prosecuted.  It is possible that the taxpayer will only be required to pay the taxes owing, plus interest.

Mark Feldstein Corporate Taxes, Personal Taxes Tax Evasion, tax penalties, Voluntary Disclosure

In May 2009 the Canada Revenue Agency (CRA) laid six charges against Gordon Jackson:  two charges of tax evasion, two charges of obtaining income tax refunds to which he was not entitled and two charges of obtaining benefits to which he was not entitled.   On May 5, 2010 Mr. Jackson pleaded guilty to all charges in the Ontario Court of Justice in London, Ontario.  He was fined a total of $81,288 and sentenced to time served.

By failing to report commission income of $259,754 on his 2003 and 2004 income tax returns Mr. Jackson  evaded federal income taxes in the amount of $72,395.  He also received tax refunds of $5,260 and Canada Child Tax Benefit payments of $3,633. The commission income was earned when Mr. Jackson was employed by a technologies company in British Columbia.   He was fully aware that it was necessary to report all commission income and that he was required to pay all taxes on the income.

In November  of 2009 Mr. Jackson was found to be dwelling in Vancouver.  Through the Vancouver Police Department’s Con Air Program Mr. Jackson was brought back to London, Ontario on November 28, 2009.  He remained in custody until his court date.

To avoid penalty or prosecution by the CRA individuals and corporations can file tax returns from previous years and/or report previously undisclosed income under the Voluntary Disclosures Program.  Provided that the taxpayer/corporation files outstanding returns and reports undisclosed income prior to the CRA initiating action or investigation, there will be no penalty or prospect of prosecution and the taxpayer may only be required to pay taxes owing, plus interest.

Mark Feldstein Personal Taxes, Tax Convictions Tax Evasion, Voluntary Disclosure

Soda Trading International Inc. of Guelph, Ontario was charged with two counts of failing to file corporate tax returns.  Stephen McDonald, one of the company’s corporate officers, pleaded guilty  to failing to file corporate returns for 2005 and 2006 and was fined $1,000 for each count.  Once charges were laid by the Canada Revenue Agency (CRA), the company filed the outstanding tax returns.

As well as paying the fine imposed, taxpayers and corporations are required to file the outstanding tax returns, pay all taxes owing, plus interest and pay any civil penalties determined by the CRA.

In order to avoid penalty or prosecution, individuals and corporations can file outstanding tax returns and declare previously unreported income under the CRA’s Voluntary Disclosures Program, if they do so before the Agency commences any action or investigation against them.  By voluntarily disclosing the above noted information, penalty and/or prosecution by the CRA may be circumvented.

Mark Feldstein Corporate Taxes, Tax Convictions Tax Evasion, tax penalties, Voluntary Disclosure

David R. Bucknell of Vienna, having pleaded guilty to eight accounts of failing to file tax returns, was fined $1,000 for each count, resulting in a total fine of $8,000. As well as paying the fine imposed, it is required that the taxpayer file their tax return, pay their taxes, any interest owing and any civil penalties charged by Revenue Canada.

Mr. Bucknell neglected to file personal income taxes return from 2000 to 2008. He was given five months to file these returns with the CRA.

It is possible to avoid tax problems by filing outstanding tax returns or reporting undisclosed income via voluntary disclosure. When individuals disclose this information voluntarily, prior to any action or investigation by the CRA they will not be penalized or prosecuted. As a result of voluntary disclosure the taxpayer may only be required to pay the taxes and any interest owing.

Mark Feldstein Personal Taxes Tax Amnesty, Tax Evasion, Vienna

On April 8, 2010, Antonio Amaral of Hamilton, Ontario pleaded guilty to two counts each of Income Tax evasion and GST evasion. He willfully evaded paying personal income tax in the amount of $23,709 and GST in the amount of $27,158. He was given two years to pay a fine of $38,152, the fine being in addition to any taxes and interest owed, as well as any civil penalties that may be assessed by the CRA.

A cross reference check of Statement of Contract Payment Forms submitted by contractors who had hired Mr Amaral for masonry services determined that he had not declared this income on his personal Income Tax Returns. Furthermore, a search of Mr. Amaral’s residence, revealed that he deliberately failed to report income from his masonry business; Active Masonry on his personal income tax returns for 2005 and 2006. According to invoices discovered during the search Mr. Amaral had unreported income of $39,771 for 2005 and $84,125 for 2006.

Active Masonry began operating and was registered for GST in January 2003. However, the 2003, 2004 and 2005 personal income tax returns filed by Mr Amaral reported business income from a cleaning business “Azores General Cleaning” with no mention of a masonry business. Mr. Amaral reported the masonry business on his 2006 return but the income earned was significantly understated. Additionally, Mr Amaral failed to report and remit GST for Active Masonry, thereby evading $4,792 in GST for the period ending in 2005, and $22,366 in 2006.

When individuals or corporations are convicted of tax evasion, they have to pay the full amount of tax owing, plus interest compounded daily and penalties the CRA assesses. In cases of gross negligence, the Income Tax Act and Excise Tax Act allow the CRA to assess a penalty of up to 50%. In addition, on summary conviction there can be an additional penalty of up to 200% of the tax evaded. The court can also levy a jail sentence for up to two years.

Individuals who have not reported all of their income or are behind in filing their returns can apply under the voluntary disclosure program to correct their tax problem. There will be no penalty or prosecution if they make a full disclosure before the Canada Revenue Agency starts any action or investigation against them. The individual will still be required to pay taxes owing plus interest.

Mark Feldstein Corporate Taxes, Personal Taxes, Tax Convictions Tax Evasion, tax penalties

On April 9, 2010, Gayle Caldwell, of Kingston pleaded guilty in the Ontario Court of Justice to one count of Income Tax evasion and one count of GST evasion. Ms. Caldwell was levied a fine in the amount of $7,000 and was allowed one year to pay the fine.

Ms. Caldwell knowingly understated her taxable income earned by not reporting income for 2001, 2002, 2003, 2004 and 2005. The Canada Revenue Agency determined that Ms. Caldwell did not report taxable income in the amount of $27,572 on her 2001 through 2005 T1 income tax returns. She also did not report taxable supplies on her GST returns for the period 2001 to 2005. Ms. Caldwell did not pay tax in the amount of $5,064 in respect to her 2001 through 2005 T1 tax returns. She also did not pay GST in the amount of $1,936 on her 2001 to 2005 GST returns.

Many taxpayers believe that Canada Revenue Agency will not prosecute individual small business owners. They often think CRA will only go after the big companies. This is an example where CRA will commence an action against a small business owner who has not reported all of their income. Ms Caldwell found out that CRA will aggressively go after individuals that do not report all of their income.

When individuals or corporations are convicted of tax evasion, they have to pay the full amount of tax owing, plus interest and penalties that the CRA assesses. In cases of gross negligence, the Income Tax Act and Excise Tax Act allow the CRA to assess a penalty of up to 50% of the unpaid tax. In addition, the court may, on summary conviction fine the taxpayer 50% to 200% of the tax evaded plus a jail sentence up to two years.

Individuals who have not reported all of their income or are behind in filing their returns can apply under the voluntary disclosure program to correct their tax problem. There will be no penalty or prosecution if they make a full disclosure before the Canada Revenue Agency starts any action or investigation against them. The individual will still be required to pay taxes owing plus interest.

Mark Feldstein Corporate Taxes Tax Evasion

No problem, but if so, there are some important things you need to know. Cash payments must be reported on your annual income tax return. They are also subject to GST/HST. Failure to report cash payments is tax evasion.

For example, if you fail to report all income earned, cash or otherwise, fail to report and remit GST/HST, fail to file T5018 returns for sub-contractors, file as self-employed when you are an employee or claim personal expenditures on your business tax return … there can be serious consequences. You could be subject to heavy fines, lose your assets, go to jail or all of the above

Canada Revenue Agency (CRA) uses a variety of sophisticated tools and tactics to enforce tax compliance, including:

• information from external sources
• co-operation with workers’ compensation boards and other agencies
• business and lifestyle audits
• investigating complaints by citizens

Paying your taxes is the law. Paying your taxes is also simpler than dealing with the consequences. It may feel overwhelming if you have fallen behind, but Mark Feldstein & Associates can help you set the record straight.

You may even qualify for penalty and/or prosecution relief under the CRA’s Voluntary Disclosures Program (VDP). For more information on the VDP contact Mark Feldstein & Associates. We specialize in taxation and accounting for Tax Amnesty.

Mark Feldstein Corporate Taxes Tax Evasion

William Joseph McCarvell, a real estate agent in London, was fined a total of $16,000 after pleading guilty to 16 charges of failing to file personal and corporate tax returns by the required due dates.

McCarvell operated under the name Bill McCarvell Realty Inc. In June 2009, he was fined $8,000 for not filing his 2003 to 2006 personal income tax returns, as well as the 2001 to 2004 corporate returns. He was ordered him to file these eight outstanding returns with the Canada Revenue Agency (CRA) by September 30, 2009.

In November 2009, McCarvell pleaded guilty to not filing his 1999 to 2002 personal tax returns, as well as corporate tax returns for 1999, 2000, 2005 and 2006. He was fined an additional $8,000. A new compliance order required McCarvell to file these additional eight returns by February 1, 2010.

When convicted, in addition to court imposed fines, individuals or corporations are still obligated to file the tax return(s) and pay the full amount of taxes owing, plus interest, as well as any penalties assessed by the CRA.

If you have not filed returns, or have not reported all income, you may qualify for penalty and/or prosecution relief under the CRA’s Voluntary Disclosures Program (VDP) subject to certain conditions. One condition is that you must apply and make full disclosure before the Agency starts any action or investigation.

For more information on the Voluntary Disclosures Program contact Mark Feldstein & Associates. We specialize in taxation and accounting for Tax Amnesty. We can help.

Mark Feldstein Corporate Taxes, Personal Taxes criminal charges, Tax Evasion

Robert Sproats, of Brampton, pled guilty in October 2009 to two counts of failing to file tax returns. He was fined $2,000. A Canada Revenue Agency (CRA) investigation showed that Sproats failed to file his 2007 personal income tax return and as Director of Deborah Thomson School of Dance & Fitness Inc., failed to file the company’s 2007 corporate tax return.

Anyone who does not file a personal, corporate, or GST/HST return as required is guilty of an offence. On conviction, they are subject to a fine of between $1,000 and $25,000, or both the fine and imprisonment for up to 12 months, for each count. CRA says that in addition to any fines imposed by the courts, they are still obligated to file the tax return and pay the full amount of taxes owing, plus interest, as well as any penalties assessed by the CRA.

Individuals who have not filed returns, or who have not reported all their income, may qualify for penalty relief under the Voluntary Disclosures Program (VDP). “They will not be penalized or prosecuted if they make a full disclosure before the Agency starts any action or investigation against them,” says CRA in a news release. “These individuals may only have to pay the taxes owing, plus interest.”

For information on the Voluntary Disclosures Program contact us and learn how Mark Feldstein & Associates can help you correct your tax affairs.

Mark Feldstein Corporate Taxes, Personal Taxes Tax Evasion, tax penalties

Joseph Cirillo, of Niagara Falls, pled guilty in October 2009 to seven counts of failing to file corporate income tax returns. He was fined $1,000 for each count. A CRA investigation showed that Cirillo failed to file corporate tax returns as the director of Done-Rite Paving Co Ltd and as the director of 1602013 Ontario Inc.

When individuals or corporations are convicted of failing to file tax returns, in addition to any fines imposed by the courts, they are still obligated to file the tax return and pay the full amount of taxes owing, plus interest, as well as any civil penalties that may be assessed by the Canada.

Individuals who have not filed returns for previous years, or who have not reported all of their income, can still voluntarily correct their tax affairs. They will not be penalized or prosecuted if they make a full disclosure before the Agency starts any action or investigation against them. These individuals may only have to pay the taxes owing, plus interest.

For information on the Voluntary Disclosures Program contact us and learn how Mark Feldstein & Associates can help you correct your tax affairs.

Mark Feldstein Corporate Taxes criminal charges, Tax Evasion