Canada Revenue Agency - Toronto Tax Services Office

Canada Revenue Agency - Toronto Tax Services Office

November 22, 2006 11:34 ET

Canada Revenue Agency: Electrical Contractor Fined $27,100 for Tax Evasion

KINGSTON, ONTARIO--(CCNMatthews - Nov. 22, 2006) - Jan Robert Klima of Plevna, Ontario, pleaded guilty to one count of income tax evasion and one count of goods and services tax (GST) evasion yesterday in the Ontario Court of Justice in Kingston. He was fined $27,100, which represents 100% of the taxes evaded.

A Canada Revenue Agency (CRA) investigation discovered that Mr. Klima failed to report business income totalling $72,506 that he earned as sole proprietor of an electrical contracting business from 2002 to 2004. During most of this period, Mr. Klima reported other employment income, but failed to report the income he earned as an electrical contractor. The total amount of federal income tax he evaded was $21,500.

In addition, Mr. Klima failed to register for GST for his business, yet collected GST from his customers from 2002 to 2004. The total amount of GST collected but not remitted to the CRA was $5,600.

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 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

  • Media information:
    Canada Revenue Agency
    Barbara Gal
    Manager, Communications
    (905) 615-2117
    Website: www.cra.gc.ca