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What happens if my tax preparer puts down expenses I did not spend?
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david ingram replies:
An old client was in a couple of weeks ago with a $10,000 tax bill she =
had received retroactively after dealing with a tax consultant I will =
call LH. LH had been putting down thousands of dollars of expenses for =
his clients and everyone got away with it for several years until the =
CRA caught up in the last year. =20
Just a little warning that if your consultant is adding a lot of dollars =
of expense that you did not make, run away. If he or she is doing it =
for you, he or she is likely doing it for everyone else and you will ALL =
be caught.
Because of the situation, I dug out this old case and send it on for =
your edification and Monday Morning reading.
david ingram
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Ontario tax preparer receives large fine and conditional =
custodial term for evading payment of GST and other federal taxes
SUDBURY, Ontario, November 5, 1999 - The Canada Customs and =
Revenue Agency (CCRA) reported today that Th=E9rese Lacroix of Hearst, =
Ontario, was fined $1,290,824 by Ontario provincial court in Timmins =
after pleading guilty to wilfully evading $645,412 of Good and Services =
Tax (GST) and other federal taxes.
An extensive CCRA investigation revealed that during the 1989 to =
1994 taxation years, Lacroix, who ran a bookkeeping business, used =
sophisticated schemes in failing to report $2,259,501 on the personal =
income tax returns of 48 clients, consequently evading $452,962 in =
federal income tax. The court also found that between 1991 and 1994, =
Lacroix evaded $134,699 of GST on behalf of 26 clients.
Some of the schemes used by Lacroix to avoid reporting income =
included the understating of gross business income of clients, advising =
clients to use separate bank accounts, erasing amounts recorded by =
clients in their journals, removing documents from the files of clients, =
and forging signatures on false child care expense receipts.
The CCRA investigation also revealed that from 1990-1994, Lacroix =
failed to declare $244,463 of taxable income from her bookkeeping =
business on personal income tax returns, consequently evading an =
additional $57,750 in federal taxes.
Lacroix was fined a total of $1,290,824, an amount equal to 200% =
of the amount she attempted to evade, andsentenced to a conditional =
custodial term of two years less one day, with custody to be served in =
the community. This sentence will be followed by two years of probation =
with the most important term being that Lacroix is not to provide =
business or tax advice to anyone but her spouse. Lacroix also is =
required to pay the full amount of GST and other federal taxes owing, =
plus interest and penalties.
Canadians have to be confident that the tax system is fair. The =
CCRA will take action against individuals and organizations who try to =
evade taxes. People who deliberately evade taxes, fraudulently claim =
refunds, or fail to make the proper remittances force honest Canadians =
to pay more than their fair share.
Individuals or organizations who have not filed returns for =
previous years, have not reported all their income, or have claimed =
fraudulent refunds can still voluntarily correct their tax affairs. =
Through the Voluntary Disclosure Program, the CCRA does not penalize or =
prosecute if a full disclosure is made before the Department starts any =
action or investigation. Individuals or organizations will only have to =
pay the taxes owing plus interest.
For media information
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Updated: 2002-11-04 Important notices=20
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You may find more answers at www.centa.com
David Ingram of the CEN-TA REALTY Group
US / Canada / Mexico tax and working Visa Specialists
US / Canada Real Estate Specialists
4466 Prospect Road
North Vancouver, BC, CANADA, V7N 3L7
(604) 980-0321 - Fax 913-9123 [email protected]
www.centa.com www.david-ingram.com
Res (604) 980-3578
calls taken seven days a week from 10 AM to 10 PM Vancouver (Los =
angeles) time.
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