Northern Ontario Construction Company Fined $200,000 for Tax Evasion

SUDBURY, ONTARIO--(Marketwired - Feb. 26, 2014) - The Canada Revenue Agency (CRA) announced today that R M Belanger Limited, operating as Belanger Construction, of Chelmsford, Ontario, pleaded guilty in the Ontario Court of Justice in Sudbury, Ontario, to one count of tax evasion. The corporation was fined a total of $200,000.

A CRA investigation revealed that, Belanger Construction (Belanger), in 2008 and 2009, recorded overtime pay in the amount of $1,242,357 as non-taxable allowances. The employees then received payment for overtime by way of a separate cheque which was not part of the payroll or, by having Belanger pay directly for some of their personal expenses. In doing so, Belanger avoided withholding and remitting the required income tax, Canada Pension Plan (CPP) contributions and Employment Insurance (EI) premiums. Belanger did not record the overtime as income on the T4's prepared for the employees. As a result, employees who under-reported their taxable income for the 2008 and 2009 taxation years have been reassessed for additional federal taxes.

Belanger has also been reassessed for the failure to withhold and remit CPP contributions and EI premiums on the overtime paid in the form of non-taxable allowances for the period of January 1, 2008 to December 31, 2009.

Belanger fully cooperated with the CRA throughout the course of the investigation.

The preceding information was obtained from the court records.

"Under the Canadian tax system, the government relies on Canadians to pay the taxes they owe," said Darrell Mahoney, Assistant Commissioner, Ontario Region, CRA. "The Agency takes appropriate measures to ensure that everyone meets their tax obligations."

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.