CRA Press Release: London Restaurateur Fined $43,070 for Tax Evasion

I cannot stress enough the importance of opening mail from the government, all governments, especially the Canada Revenue Agency (CRA).  Of more importance, if the CRA is looking for information, or tax returns, or if the notices are getting progressively more threatening, it’s a very good sign that you may need to speak to a professional to determine how to best proceed.

The CRA regularly issues press releases regarding tax evasion, and they have a link on their website related to convictions, here; http://www.cra.gc.ca/convictions.

The Canada Revenue Agency (CRA) announced today that on July 2, 2014, Jamil Barakat and 1441126 Ontario Inc. both of London, Ontario, were sentenced in the Ontario Court of Justice in London to a fine of $43,070.  On November 8, 2013, Barakat and 1441126 Ontario Inc. pleaded guilty, in the same court, to two counts of income tax evasion each.  1441126 Ontario Inc. also pleaded guilty to three counts of evading GST/HST. The fine represents 100% of the total taxes evaded. The fine has since been paid in full.

A CRA investigation revealed that 1441126 Ontario Inc., operating as Barakat Restaurant, failed to report $259,624 in taxable income on its 2007 and 2008 returns, which resulted in the evasion of $27,054 in federal corporate taxes. The corporation also understated its net GST payable for three quarterly periods in 2007, thereby evading an additional $2,976 in GST. The investigation also revealed that Jamil Barakat, in his role as director of 1441126 Ontario Inc., failed to report on his 2007 and 2008 personal tax returns $51,678 he appropriated from the restaurant.  By doing so Barakat evaded an additional $13,040 in federal income taxes.

The preceding information was obtained from the court records.

When individuals are convicted of income tax and GST/HST evasion, they must still repay the full amount of taxes owing, plus interest and any civil penalties that may be assessed by the CRA.  In addition, the court may fine them up to 200% of the taxes evaded and impose a jail term of up to five years.

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 http://www.cra.gc.ca/voluntarydisclosures.

For a free 15-minute consultation, call or email inTAXicating Tax Services at info@intaxicatingtaxservices@gmail.com.  We can be reached at 416.833.1581.

 

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Author: Warren Orlans

Welcome to inTAXicating. My name is Warren Orlans and this is my blog. With over 17-years experience in the taxation industry, 11 of them working for the Canada Revenue Agency (CRA), and the rest working in the private sector at large financial institutions responsible for resolving tax issues for corporations and individuals and the Canadian lead for a large US bank on FATCA implementation. My tax career began pretty much out of university at the CRA, in Collections, where I moved up, across, over and up again through their division with stops in Enforcement, Taxpayer Relief (then Fairness), Audit, Directors Liability, Training, Mentoring, GST, GST/HST, Payroll, Corporate Tax, Personal tax, and probably much more. If you have a collections, compliance or audit issue with the CRA, MRQ, IRS or with the CRTC, WSIB or any aspect of those agencies, inTAXicating is the place you need to contact. inTAXicating has entered into a strategic partnership with Goldhar and Associates, to create Goldhar Tax Solutions. This partnership allows my team to include amazing tax lawyers, insolvency practitioners, mortgage brokers, debt counselling experts and much more. When dealing with governments, knowledge is power. We possess strong understanding of government so we know what the next step is before the government does. When you have a collections problem with the CRA, do you hire a graphic artist? No, you get a former collector who trained the staff, and who worked as a resource officer for 5 years. Then you know you are on the right track to resolving your tax problem(s). Others offer suggestions. We offer solutions! tax@goldhar.ca

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