TAX NEWS - June 2010

Canadian Tax: Moose Jaw businessman pleads guilty to tax evasion, fined $25,700

REGINA — Earl Ivor Swalm, 44, of Moose Jaw pleaded guilty in Moose Jaw Provincial Court to tax evasion and assisting his wife to obtain Canada Child Tax Benefits (CCTB) and Goods and Services Tax Credits (GSTC) to which she was not entitled.

Swalm was fined $25,700 and paid the fine at the time of sentencing, the Canada Revenue Agency (CRA) said in a press release Wednesday.

The fine represents approximately 80 per cent of the taxes evaded and benefits received. In addition to the court fines, he must still pay the outstanding taxes and benefits, plus penalties and interest.

Swalm, president and owner of a Moose Jaw flooring business, Dynamic Enterprises Ltd., which operates as Carpet One, was fined $12,500 for tax evasion in 2007.

He was also ordered by the court to provide the Canada Revenue Agency (CRA) with financial, banking and contractor information. Swalm did not comply with that order and was fined an additional $8,000 in April 2008.

When the CRA obtained and reviewed the business records, the agency discovered discrepancies that subsequently led to new criminal charges.

The investigation found that Swalm directed the company not to issue T4 slips for his wages. Between 2004 and 2006, he failed to report income totalling $145,899, thereby evading personal income taxes of $21,681.

By underreporting his income, he and his wife received additional CCTB and GSTC benefits totalling $10,504.

Arguments used in his earlier court cases and evidence seized during a search of his residence and business showed that Swalm relied on arguments used by various groups that claim that people can refuse to comply with Canadian tax laws.

Canada Revenue Agency (CRA) warns that individuals may expose themselves to serious financial and legal problems if they fail to comply with Canadian Income Tax Act and other tax laws.

For more information, visit the Canada Revenue Agency (CRA) website.