OTTAWA, ONTARIO--(Marketwire - Jan. 10, 2013) - The Canada Revenue Agency (CRA) announced today that Clarke and Mary Margaret Webster of Ottawa, Ontario, pleaded guilty in the Superior Court of Justice in Ottawa on January 7, 2013 to one count each of tax evasion. Clarke Webster was sentenced to a one-year conditional sentence, including six months of house arrest and fined $263,811. Mary Margaret Webster was sentenced to a six-month conditional sentence, including three months of house arrest, and fined $78,596. Both fines represent 100% of the total federal income tax evaded, and are due paid in full by January 7, 2014.
A CRA investigation found that Mr. Clarke Webster failed to report $791,410 in income he earned from 2004 to 2009 during which time he followed a tax evasion scheme promoted by Russ Porisky through the Paradigm Education Group (Paradigm). The Paradigm scheme is based on the faulty premise that the Federal Government cannot impose a direct tax on a human being because it would be unconstitutional and further, that taxing the labour of a human being would violate the Canadian Bill of Rights as it is a confiscation of property. Mary Margaret Webster, who also followed the Paradigm scheme, failed to report the $370,500 in income she earned from working at her husband's dental practice for tax years 2004 to 2008.
Both Clarke and Mary Margaret Webster now renounce their previously held views under Paradigm. They acknowledge that the Paradigm scheme was preposterous, taught principles that were contemptuous of the rule of law and was aimed solely at the evasion of the payment of taxes. They both acknowledge that they were mistaken in following the scheme and would warn others of the personal and professional perils of taking part in such schemes.
The preceding information was obtained from the court records.
"The overwhelming majority of Canadians pay their taxes in full and on time," said Vince Pranjivan, Deputy Assistant Commissioner of the Ontario Region of the Canada Revenue Agency. "In fairness to them, the Canada Revenue Agency makes sure that people who try to avoid paying taxes are held to account."
The Canada Revenue Agency warns all Canadians to beware of individuals that try to convince you that Canadians do not have to pay tax on the income they earn. These individuals, also known as tax protesters, not only fail to report their own earnings, but they also conspire, counsel, and promote these tax schemes. Canadian courts have repeatedly and consistently rejected all arguments made in these tax protester schemes. For those involved in tax protester schemes, the CRA will reassess income tax, and charge interest and penalties. In some cases, these individuals will be prosecuted for tax evasion. If convicted, they could face significant fines and possibly jail time. More information on tax protester schemes is available at www.cra.gc.ca/alert.
Taxpayers who have not filed returns for previous years, or who have not reported all of their income, can still voluntarily correct their tax affairs. They may not be penalized or prosecuted if they make a valid disclosure before they become aware of any compliance action being initiated by the CRA against them. These taxpayers may only have to pay the taxes owing, plus interest. More information on the Voluntary Disclosures Program (VDP) can be found on the CRA's Web site at www.cra.gc.ca/voluntarydisclosures.
Further information on convictions can also be found in the Media Room on the CRA website at www.cra.gc.ca/convictions.