By Anthony Capkun
February 26, 2014 – R M Belanger Ltd. of Chelmsford, Ont.—operating as Belanger Construction—pleaded guilty in the Ontario Court of Justice in Sudbury, says Canada Revenue Agency (CRA), to one count of tax evasion, and was fined a total of $200,000.
A CRA investigation revealed that Belanger recorded overtime pay in the amount of $1,242,357 as non-taxable allowances in 2008 and 2009. The employees then received payment for overtime by way of a separate cheque that was not part of the payroll or, by having Belanger pay directly for some of their personal expenses.
In doing so, Belanger avoided withholding and remitting the required income tax, Canada Pension Plan (CPP) contributions and Employment Insurance (EI) premiums. Belanger did not record the overtime as income on the T4s prepared for the employees. As a result, employees who under-reported their taxable income for the 2008 and 2009 taxation years have been reassessed for additional federal taxes.
Belanger has also been reassessed for the failure to withhold and remit CPP contributions and EI premiums on the overtime paid in the form of non-taxable allowances for the period of January 1, 2008 to December 31, 2009.