CRA Convictions: Former Senior Liberal Adviser Convicted of Failure To Report Income and Benefits

The CRA has reported that Herb Metcalfe, a former senior adviser to Stephane Dion and Liberal lobbyist has received a conditional sentence of two years less a day – including 12 months house arrest – for failing to report $1.4-million in payment and benefits between 2002 and 2006.

Mr. Metcalfe pled guilty to one count of income-tax evasion and was fined $396,259, which represents 100% of the total taxes evaded.

A CRA investigation focused on Mr. Metcalfe’s work as a director and employee of the Capital Hill Group Ottawa Inc., which the agency describes as “a political lobbying business.”  He is no longer a member of this group – having stepped aside from the business.

The agency states that Mr. Metcalfe prepared his tax returns each year by hand and either knew, “or was willfully blind to the fact,” that the income he received was required to be reported on his returns.

“The Canada Revenue Agency pursues tax evaders to maintain public confidence in the integrity of the tax system,” said my former Director of the Toronto North Tax Services Office, Vince Pranjivan, who is now the CRA’s assistant commissioner for the Ontario Region.

The CRA issued a news release dated Nov. 18, 2015, outlining the fine and conviction. However the release did not immediately receive media attention due to public-service rules related to communicating during an election.  Mr. Metcalfe was sentenced on September 30th, 2015 which was during the Federal election campaign, which meant the CRA posted the conviction on November 18th and at that time was able to notify the media.

 

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CRA Conviction Notice: Tax Protester Sentenced to 4-Years in Prison.

On November 27th, 2015, the Canada Revenue Agency (CRA) issued notice that Nicolet, Quebec resident and tax protester named Christian Lachapelle was sentenced to four years in prison by a Court in Quebec.  Lachapelle plead guilty October 22nd, 2014 to charges related to tax fraud.

A Canada Revenue Agency (CRA) investigation revealed that, between June 2007 and November 2010, Mr. Lachapelle advised and enabled 93 individuals to avoid, or try to avoid, paying nearly $2 million in income tax for the 2003 to 2010 tax years.

The scheme used by Mr. Lachapelle consisted of helping or advising individuals to file income tax returns or request a reassessment using the distinction between a “natural” person and a “legal” person.

For some reason, tax protesters continue to attempt this avenue to avoid having to pay taxes and in doing so regularly convince others that this technique can be used when Canadian courts have repeatedly and consistently rejected such arguments.

This is not the first time that Mr. Lachapelle has had issues with the CRA and the law. He was sentenced to 30 days in jail in 2012 for failing to file his income tax returns despite a court order, as well as fines of $7,000 in 2005 and $14,000 in 2011 for the same reasons.

All case-specific information above was obtained from the court records.

The Canada Revenue Agency warns the public to beware of people who assert 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 such schemes, the CRA will reassess income tax and interest, and charge penalties – usually Gross Negligence Penalties too which can represent at minimum 50% of the tax being evaded.

More information on tax protester schemes can be found on the CRA website, here: www.cra.gc.ca/alert.

If you have ever made a tax mistake or omission, you have the ability to correct this error through the Canada Revenue Agency’s Voluntary Disclosures Program (VDP).

You must make the full and complete disclosure before you become aware that the CRA is taking action against you, and if accepted, you may only have to pay the taxes owing plus interest (not penalties).

More information on the CRA’s VDP can be found on the CRA’s website atwww.cra.gc.ca/voluntarydisclosures.

Additional information on CRA convictions can be found on the Media page of the CRA website at www.cra.gc.ca/convictions.

inTAXicating Tax Services exists to provide clarity and solutions for CRA questions and problems.  If you think you have done something wrong, and the CRA might want to assess / re-assess / audit you or your company, you should check with us first.

http://www.intaxicating.ca

info@intaxicating.ca

Real CRA collections experience.  On your side!