It's income tax time. And the Canda Revenue Agency (CRA) wants to ensure that everyone knows that tax evasion schemes are illegal -- and can result in jail time.
One such scheme, called "Paradigm," has resulted in convictions and sentences for 32 people so far -- self-styled "educators" who promoted a fraudulent tax-evasion scheme. Paradigm sold products (books, DVDs, and CDs), organized and taught fee-based seminars which “educated” people on how to structure their affairs in an attempt to illegally avoid taxes.
In August, 2016, Russell Porisky of Chilliwack was sentenced to serve five and a half years in prison; and on February 28, 2017, Michael Spencer Millar of North Vancouver was sentenced to serve two and a half years in jail, and to pay fines totaling $24,000. The judge stated that Mr. Millar deliberately encouraged his students to file false income tax returns by not declaring their taxable income.
Mr. Millar was convicted and sentenced in relation to charges of income tax evasion, goods and services tax (GST) evasion, and counseling fraud.
A CRA investigation determined that Mr. Millar failed to report total income of $126,431 for the 2004 to 2008 tax years and, as a result, evaded $12,381 in federal income tax payable. In addition, Mr. Millar failed to collect and remit $11,874 in GST for the 2005 to 2008 tax years.
The scheme reached into the West Kootenay. "Courses" were put on by Paradigm in a number of places, including Kaslo.
In a recent press release, the CRA warns all Canadians to beware of “tax protesters” who try to convince you that Canadians do not have to pay tax on the income they earn. Canadian courts have repeatedly and consistently rejected arguments made in these tax protester schemes.
For those involved in tax protester schemes, the CRA will reassess income tax and interest, and charge penalties. In addition, if convicted of tax evasion, the court may fine them up to 200% of the tax evaded and sentence them for up to a five-year jail term. More information on tax protester schemes is available at www.cra.gc.ca/alert.
But if you have made an error, the CRA offers this comforting assurance: If you have ever made a tax mistake or omission, the CRA is offering you a second chance to make things right through its Voluntary Disclosures Program (VDP). If you make a valid disclosure before you become aware that the CRA is taking action against you, you may only have to pay the taxes owing plus interest.
More information on theVDP can be found on the CRA's website at www.cra.gc.ca/voluntarydisclosures.
Many people may disagree with how government allocates our tax dollars, and we all have a right to disagree -- but that doesn't give anyone the right to refuse to pay, or to file income tax returns with false information.