TAX NEWS - 2010

Ontario Tax: Man convicted of tax evasion

Bobcaygeon man pleads guilty to income tax related charges; fined $22,090

(LINDSAY) A Bobcaygeon man has been fined a total of $22,090 after pleading guilty to income tax-related charges last week.

Canada Revenue Agency officials say court records show that Joey James Kezar pled guilty to one count of income tax evasion, one count of GST evasion, and one count of obtaining tax refunds and credits to which he was not entitled.

The court fines are in addition to Mr. Kezar's civil reassessments, which included additional taxes owed, penalties, interest charges, and repayment of unwarranted refunds and credits, totalling more than $116,000.

The case was heard in court in Lindsay on June 17.

A press release issued by Canada Revenue Agency (CRA) states an investigation determined that Mr. Kezar failed to provide full disclosure and accurate information to his tax preparer when filing his 2005 and 2006 income tax returns. He also failed to report all sales from his business in his filed GST returns in relation to block and brick work and chimney repair services he provided.

Officials say that because he understated his net business income by more than $167,000 during the years noted, Mr. Kezar received an unwarranted tax refund for the 2005 year, and further, his family also received unwarranted GST credits and Canada Child Tax Benefits (CCTB) for 2005 and 2006.

Canada Revenue Agency (CRA) sought a court fine of 50 per cent of the total federal income tax and GST evaded and unwarranted refunds and credits received. Mr. Kezar was fined $16,592 for the personal income taxes he evaded, and $1,517 relating to GST. For the unwarranted refunds and credits he and his family received, he was fined $3,981.

Officials noted that when individuals or corporations are convicted of tax evasion, they have to pay the full amount of tax owing, plus interest, and any 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 per cent of the unpaid tax or the improperly claimed benefit. In addition, the court may, on summary conviction, fine them 50 to 200 per cent of the tax evaded, and sentence them to up to two years in jail.

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. More information on the Voluntary Disclosures Program (VDP) can be found on the CRA's website at www.cra.gc.ca/voluntarydisclosures.