Canada Revenue Agency

Canada Revenue Agency

June 07, 2016 11:46 ET

Markham Tax Preparer Sentenced for Fraud

NEWMARKET, ONTARIO--(Marketwired - June 7, 2016) - The Canada Revenue Agency (CRA) announced today that on June 6, 2016, Lawrence Watts of Markham, Ontario was sentenced in the Ontario Superior Court of Justice in Newmarket to six years in jail and a court-imposed fine of $149,129. On October 22, 2015, Watts was found guilty by jury, in the same court, of one count of fraud over $5,000 under the Criminal Code.

A 28-month CRA investigation revealed that Watts, owner and operator of Fiscal Arbitrators, claimed false business losses on income tax returns he prepared on behalf of 241 of his clients. These fictitious losses enabled these clients to receive or attempt to receive approximately $10 million in federal tax refunds. Through Fiscal Arbitrators, Watts promoted the incorrect notion that Canadians do not have to pay tax on income they earn, and counseled clients on how to restructure their affairs to evade payment of income tax.

The preceding information was obtained from the court records.

"In order to maintain public confidence in the integrity of the tax system, the Canada Revenue Agency pursues those who prepare fraudulent returns," said Vince Pranjivan, Assistant Commissioner of the Ontario Region. "Canadians have to trust that our self-assessment system is working and that it is fair."

The Canada Revenue Agency warns all Canadians to beware of "tax protesters" who try to convince you that Canadians do not have to pay tax on the income they earn. Canadian courts have repeatedly and consistently rejected arguments made in these tax protester schemes. For those involved in tax protester schemes, the CRA will reassess income tax and interest, and charge penalties. In addition, if convicted of tax evasion, the court may fine them up to 200% of the tax evaded and sentence them for up to a five-year jail term. More information on tax protester schemes is available at www.cra.gc.ca/alert.

If you have ever made a tax mistake or omission, the CRA is offering you a second chance to make things right through its Voluntary Disclosures Program (VDP). If you make a valid disclosure before you become aware that the CRA is taking action against you, you may only have to pay the taxes owing plus interest. More information on the VDP can be found on the CRA's website at www.cra.gc.ca/voluntarydisclosures.

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

Contact Information

  • Paul Murphy
    Manager, Communications
    (416) 952-8105