Canada Revenue Agency

Canada Revenue Agency

February 26, 2009 16:33 ET

Ottawa Acupuncturist Fined $250,000 for Tax Evasion

OTTAWA, ONTARIO--(Marketwire - Feb. 26, 2009) - Alexander Tran, of Ottawa, pleaded guilty today to one count of income tax evasion and one count of GST evasion in the Ontario Court of Justice in Ottawa. He was fined $200,000 for the federal income tax evaded and $50,000 for the GST evaded. The $250,000 fine, which represents approximately 70% of the taxes evaded, is in addition to any taxes and interest owed, as well as any civil penalties that may be assessed by the Canada Revenue Agency (CRA).

"Canadians have to be confident that the administration of the tax system is fair," said William V. Baker, Commissioner of the Canada Revenue Agency. "That's why the Agency works to ensure that the vast majority of Canadians who pay their taxes are not penalized by those who don't."

A CRA investigation revealed that Tran, the sole proprietor of Asian Acupuncture clinic, reported approximately one quarter of the income he received from his patients. The investigation further revealed that Tran provided false information to his accountants, including false receipts to clients, and understated expense figures in an effort to match his greatly understated sales figures. In total, Tran failed to declare approximately $1 million business income, resulting in $290,000 in federal income tax evaded, and $70,000 in GST that was not remitted to the CRA.

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 www.cra-arc.gc.ca/voluntarydisclosures.

The Agency seeks publicity on convictions to maintain public confidence in the integrity of the self-assessment system and to increase compliance with the law through the deterrent effect of media coverage.

When individuals or corporations are convicted of tax evasion, they have to pay the full amount of taxes owing, plus interest, and any penalties the CRA assesses. In cases of gross negligence, the Income Tax Act and the Excise Tax Act allow the CRA to assess a penalty of up to 50% of the unpaid taxes or the improperly claimed benefit. In addition, the court may, on summary conviction, fine them 50% to 200% of the taxes 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 be found in the Media Room on the CRA website at www.cra.gc.ca/convictions.

Contact Information

  • Canada Revenue Agency
    Rebecca Merrett
    Manager, Communications
    905-277-6433