North Bay, Ontario, August 18, 2011… The Canada Revenue Agency (CRA) announced that on August 16, 2011, a Callander resident, Paul Brooks, pleaded guilty to two counts of tax evasion in the Ontario Court of Justice in North Bay. He was fined $71,797 which represents 100% of the federal taxes and Goods and Services tax (GST) that he attempted to evade.
A CRA investigation revealed that Brooks was an indirect minority shareholder of the corporation Quality Hardwoods Ltd. (QHL), a wholesaler of hardwood lumber. During the taxation years 2004 to 2007, Brooks took lumber that was purchased and expensed by the corporation and sold it himself. As well, he used employees of QHL and the resources of QHL to assist in the sale of this lumber including the preparation of invoices, ordering, warehousing and loading of the lumber. He personally pocketed $201, 844 related to these unreported sales. In addition, GST was not charged on these sales. As a result, Brooks attempted to evade $58,147 in federal income tax and $13,650 in GST during these years. All fines have been paid.
The preceding information was obtained from the court records.
“Canadian taxpayers must have confidence in the fairness of the tax system,” said Vince Pranjivan, Deputy Assistant Commissioner of the CRA, Ontario Region. “To maintain that confidence, the CRA is determined to hold tax evaders accountable for their actions.”
When individuals are convicted of income tax and GST evasion, they still must repay the full amount of taxes owing, plus interest and any civil penalties that may be assessed by the CRA. In addition, the court may fine them up to 200% of the taxes evaded and impose a jail term of up to five years.
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 valid disclosure before they become aware of any compliance action being initiated by the CRA 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.
Further information on convictions can also be found in the Media Room on the CRA website at www.cra.gc.ca/convictions