TAX NEWS - 2010

Canada Tax: Prison urged for tax evader

A local optometrist found guilty of tax evasion should be sentenced to 21/2 years in prison and fined $525,000, a judge was told Friday.

Federal prosecutor Ed Posliff said Jack Klundert's sentence would be in the "middle of the range" of penalties -- a fine of 150 per cent of the money he failed to pay the government and a prison term that would be half the maximum.

Klundert, 58, was found guilty of tax evasion last month for not paying more than $348,000 in taxes by failing to report his earnings between 1993 and 1997, which totalled $1.5 million.

Klundert said he was withholding taxes because he didn't believe the federal government had the authority to collect income tax.

He was acquitted twice for the same offence and will be back in court in September for similar offences from 2000 to 2005.

"He showed a lack of respect for the rule of law," Posliff said.

He said the sentence needs to serve as a deterrent for others.

Klundert's lawyer, Doug Christie, said his client shouldn't be subject to time in a federal penitentiary and should receive only a fine.

"He had a moral duty to do what he did," Christie said.

"You're not dealing with someone who is doing this out of self-interest." Klundert decided to "stand up to the state and disagree," Christie said.

He said there was no deceit in Klundert's actions. He submitted income tax returns with his name and address but instead of including other details he wrote a message denying the government has authority to collect income tax.

Superior Court Justice Terrence Patterson will deliver a sentence Sept. 20.

"I thought there'd be a sentence today. It's hard on Jack (Klundert) to have to wait," Christie said.

"It's been a long struggle for him." Klundert remains free pending his sentence.

Klundert was acquitted in 2002 but the Crown appealed and a second trial was ordered when the Court of Appeal found fault with jury instructions.

Christie said Klundert has already filed a notice of appeal on the conviction.

Christie called two character witnesses to talk about Klundert.

Wilfred Gallant, a retired University of Windsor professor, said he was appalled at the portrayal of Klundert as a criminal in The Windsor Star.

"I think he's a very knowledgeable and astute individual," Gallant said.

"He's a man who's willing to pay the price for his beliefs," he said.

Engineer Tom O'Dwyerm had been a client of Klundert for 22 years.

He said everyone who knows Klundert holds him in a high esteem.

When questioned by the Crown, O'Dwyer said he had been charged under the Income Tax Act himself.

He said he pleaded guilty because he didn't have the resources to fight.

More than 50 previous trials involving tax evasion were brought to Patterson's attention by both lawyers.

"Much of what I heard was for the first time," Patterson said, adding that he needed time to reflect on the arguments.

"I have an obligation to answer the questions that have been raised."