BRAMPTON, ONTARIO--(Marketwired - Sept. 24, 2013) - The Canada Revenue Agency (CRA) announced today that on September 18, 2013, Manjula Makkar and Varun Makkar, of Brampton, Ontario, pleaded guilty in the Ontario Court of Justice in Brampton to one count each of income tax evasion under the Income Tax Act. Manjula Makkar was fined $65,104 while Varun Makkar was fined $8,802, representing 50% of the total income taxes evaded.
The Court heard that the Makkars, who are related, provided tax preparation services through a partnership named Makkar and Makkar Tax Services (MMTS), operating in Brampton, Ontario. The CRA determined that the Makkars earned income from the partnership which was not reported on their personal income tax returns for the 2008, 2009 and 2010 tax years. The Court also heard that Manjula Makkar failed to report additional income earned outside the MMTS partnership through her delivery of tax preparation, bookkeeping and accounting services during the same three year period. In total, Manjula Makkar failed to report $531,457 in income, thereby evading $130,208 in taxes, while Varun Makkar failed to report $120,600 in income, thereby evading $17,606 in income taxes.
The Court levied the minimum 50% fine after learning that the Makkars cooperated fully with the CRA throughout the investigation. As well, the Makkars have already paid approximately 100% of the amounts they would have owed if they had properly filed their returns.
The preceding information was obtained from the court records.
"Tax evasion costs all of us," said Vince Pranjivan, acting Assistant Commissioner of the Canada Revenue Agency, Ontario Region. "The job of our investigators and auditors is to make sure that all Canadians pay the tax they owe."
When taxpayers are convicted of income tax and GST evasion, they still must repay the full amount of taxes owing, plus interest and any civil penalties that may be assessed by the CRA. On summary conviction, the court may fine an individual 50% to 200% of the tax evaded, and sentence them to a jail term of up to two years. In cases of gross negligence, the Income Tax Act also allows the CRA to assess a penalty of up to 50% of the unpaid tax or the improperly claimed benefit.
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 website 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.