Canada Revenue Agency

Canada Revenue Agency

January 22, 2010 10:04 ET

Investigation Into Tax Evasion Leads to Guilty Plea

TORONTO, ONTARIO--(Marketwire - Jan. 22, 2010) - On January 18, 2010, Arthur Stubbs, of Toronto, pled guilty in the Ontario Court of Justice in Toronto, to one charge of tax evasion. On January 20, 2010, he was fined $15,987 which represents 50% of the federal taxes he attempted to evade. The fine must be paid within 30 days.

Stubbs, a sole-proprietor of a construction/roofing business, under-reported his taxable sales from January 1, 2004 to December 31, 2006 and in doing so, evaded $31,974 in GST.

A Canada Revenue Agency (CRA) routine audit, lead to an investigation into the 2004 to 2006 quarterly GST returns, filed by Stubbs. The investigation revealed that Stubbs, who was responsible for the day-to-day operation of his business, had under-reported his taxable sales for the above noted years by a total of $733,073 resulting in total unremitted GST of $31,974.

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.

Individuals 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 will not be penalized or prosecuted if they make a full disclosure before the Agency starts any action or investigation against them. These individuals 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 website at

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

Contact Information

  • For media information:
    Kim Hynes
    Communications Manager
    705 671 0594