Canada Revenue Agency - Toronto Tax Services Office

Canada Revenue Agency - Toronto Tax Services Office

January 17, 2007 10:49 ET

Canada Revenue Agency: Masonry Contractor Fined $25,534 for Tax Evasion

PETERBOROUGH, ONTARIO--(CCNMatthews - Jan. 17, 2007) - Victor McKay of Peterborough, Ontario, pleaded guilty today to one count of income tax evasion and one count of goods and services tax (GST) evasion in the Ontario Court of Justice in Peterborough. He was fined $25,534, and given six months to pay the fine or serve six months in jail.

A Canada Revenue Agency (CRA) investigation discovered that Mr. McKay, a sole proprietor of a masonry contracting business, did not enter into the books and records all his business income. An evaluation of Mr. McKay's personal assets, family living expenses and actual reported income on his personal tax returns, determined that from 2001 to 2002 Mr. McKay failed to report business income totalling $251,000. Mr. McKay confirmed that during the period 2001 to 2002 he had made and failed to record payments to subcontractors of over $145,000. He did not enter the payments in his business books to hide his true earnings. The total amount of federal income tax Mr. McKay attempted to evade was approximately $25,000.

In addition, Mr. McKay failed to collect and remit GST from his customers for the same period. The total amount of GST not remitted to the CRA was $17,500.

"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", said Mr. Miklos, Assistant Director of Enforcement for the local tax services offices. 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.

The information in this news release was obtained from the court records.

Further information on convictions can also be found in the Media room on the CRA website at www.cra.gc.ca

Contact Information

  • Canada Revenue Agency
    Sam Papadopoulos
    Manager, Communications
    416-973-4163
    Cell: 416-275-4823