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Tax-evading carpenter nailed by CRA |
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Monday, 08 February 2010 |
Fred Santini of Woodbridge, Ont., pleaded guilty in Ontario Court of Justice on January 26 to one count of income tax evasion. He was fined $20,000, which is in addition to any taxes and interest owed, as well as any civil penalties that may be assessed by the Canada Revenue Agency (CRA).
A CRA investigation revealed that Santini—working as a carpenter in the
construction industry—received separate payments as both an employee and
a subcontractor from his employer. As a sub, Santini submitted
handwritten invoices under the name of a corporation that had been
dissolved at the time. The cheques received in the corporation’s name
were deposited into Santini’s bank account. Santini failed to include
$47,741 on his 2002 and $57,133 on his 2003 income tax returns, thereby
evading $17,455 in federal taxes.
CRA says 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 when 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.
CLICK HERE for more information on the Voluntary Disclosures Program
(VDP).
The agency says it wants publicity on convictions “to maintain public
confidence in the integrity of the self-assessment system, and to
increase compliance with the law through the deterrent effect of media
coverage”.
Note: when individuals or corporations are convicted of tax evasion,
they have to pay the full amount of tax owing (plus interest) and any
penalties CRA assesses. In cases of gross negligence, the Income Tax Act
and Excise Tax Act allow 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.
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