Canada Revenue Agency - Toronto Tax Services Office

Canada Revenue Agency - Toronto Tax Services Office

August 22, 2005 16:35 ET

Canada Revenue Agency: Brampton Travel Agent Fined $100,000 For Tax Evasion

BRAMPTON, ONTARIO--(CCNMatthews - Aug. 22, 2005) - A Brampton man was fined a total of $100,000 today in Ontario Court of Justice for tax evasion. Douglas Brown was fined after pleading guilty to two counts of evading $140,371 in federal income taxes and goods and services tax (GST). The fines must be paid within 30 months. Failure to do so will result in a 24-month jail term.

A Canada Revenue Agency (CRA) investigation revealed that Mr. Brown, who operated his own travel agency, Interline Discount Travel Services, made false statements on his 1998 to 2001 personal income tax returns by failing to report commission income, traveller fees collected, and franchise royalties received, totalling $438,325. He was fined $78,00 for evading the payment of $109,310 in federal income taxes. Mr. Brown was also fined an additional $22,000 for failing to remit $31,061 in GST and filing false GST statements from 1998 to 2001 concerning commissions he collected and earned from Canadian customers. The fines represent approximately 70% of the total federal income tax and GST evaded.

"Under the Canadian tax system, the government relies on Canadians to pay the taxes they owe," said John McCallum, Minister of National Revenue. "The Canada Revenue Agency takes appropriate measures to ensure that everyone meets their responsibilities."

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. In addition, the court may, on summary conviction, fine them up to 200% of the tax evaded and sentence them to a two-year jail term. Under the Income Tax Act, the CRA may also assess a penalty of up to 50% of the tax evaded or the benefit improperly claimed. Under the Excise Tax Act, the CRA may assess a penalty of up to 25% of the tax evaded or the rebate improperly claimed.

Individuals or corporations who have not filed tax returns for previous years, or have not reported their entire income, or claimed fraudulent refunds, can voluntarily correct their tax affairs. The CRA will not take action against those who have not complied if they voluntarily come forward, file their returns, and report and pay their taxes owing according to the law before the CRA starts any legal action or investigation against them.

To take advantage of the Voluntary Disclosures Program, clients served by the Toronto West Tax Services Office can call (905) 615-2678 or visit the CRA website at www.cra.gc.ca/voluntarydisclosures for more information.

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