Oshawa, Ontario, June 3, 2011… The Canada Revenue Agency (CRA) announced today that Nicole Brown, of Whitby, pleaded guilty on May 31, 2011, to one count of tax evasion in the Ontario Court of Justice in Oshawa. She was fined $17,741, and given 12 months to pay the fine. The fine represents 100% of the total income tax evaded, and results in a total of $35,482 in fines and federal taxes owing.
Brown was a self-employed subcontractor for an insurance company from October 2005 until August 2007, when she became a full-time employee. A CRA investigation determined that she deliberately omitted sales amounts from her income tax returns. Brown invoiced the company bi-weekly for hours that she worked at a rate of $35 per hour, and received payments to her bank account through direct deposit. The investigation further determined that Brown did not report this taxable income, totaling $104,664, on her 2005 to 2007 income tax returns. As a result of not reporting the income, she evaded the payment of $17,741 in federal income tax.
The information in this news release was obtained from the court records.
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% of the unpaid tax or the improperly claimed benefit. In addition, the court may, on summary conviction, fine them 50% to 200% of the tax evaded, and sentence them to a jail term of up to two 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 Canada Revenue Agency (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.
