Thunder Bay, Ontario, October 30, 2013… The Canada Revenue Agency (CRA) announced today that Carl Gustafson, a professional engineer (P.Eng.) and a director of Norall Group Contracting Inc., was sentenced on October 25, 2013, in the Ontario Court of Justice in Thunder Bay to a fine of $84,417 and given a nine month conditional sentence that included five months of house arrest and four months of curfew. Gustafson pleaded guilty on September 3, 2013, to one count of income tax evasion. The fine represents 100% of the total federal income tax evaded. Gustafson was given two years to pay the fine.
A CRA investigation found that Gustafson followed a tax evasion scheme promoted by Russell Porisky through the Paradigm Education Group (Paradigm) and in doing so failed to report $459,174.01 in income. The unreported income was paid to Gustafson by Norall Group Contracting Inc. for services rendered, for the years 2005 to 2009 inclusive. Gustafson was counseled to file false income tax returns by a member of the Paradigm Education Group. The Paradigm scheme is based on the faulty premise that the Federal Government cannot impose a direct tax on a human being because it would be unconstitutional and further, that taxing the labour of a human being would violate the Canadian Bill of Rights as it is a confiscation of property.
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 Ontario Region of the Canada Revenue Agency. “To maintain that confidence, the Canada Revenue Agency is determined to hold tax evaders accountable for their actions.”
The Canada Revenue Agency warns all Canadians to beware of individuals that try to convince you that Canadians do not have to pay tax on the income they earn. These individuals, also known as tax protesters, not only fail to report their own earnings, but they also conspire, counsel, and promote these tax schemes. Canadian courts have repeatedly and consistently rejected all arguments made in these tax protester schemes. For those involved in tax protester schemes, the CRA will reassess income tax, and charge interest and penalties. In some cases, these individuals will be prosecuted for tax evasion. If convicted, they could face significant fines and possibly jail time. More information on tax protester schemes is available at www.cra.gc.ca/alert.
Taxpayers 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 may 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 taxpayers 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 Web site at www.cra.gc.ca/voluntarydisclosures.
Further information on convictions can be found in the Media Room on the CRA website at www.cra.gc.ca/convictions.