Former Calgary man sentenced to 11 years in jail and fined $550,892 for tax evasion and fraud

The Canada Revenue Agency (CRA) announced that James Harvey Cameron, a former resident of Calgary, has been sentenced to 11 years in jail and fined $550,892 after defrauding investors of over $2.5 million through a deceptive investment scheme. The judge also ordered Cameron, 66, to pay restitution of $1,831,700 to his victims.

If Mr. Cameron fails to pay his fine in six months he will have to serve an additional four years in jail for default.

From 2002-2006, Cameron operated a fraudulent RRSP scheme which promised a 2% monthly return to individual investors. The scheme raised just under $8 million, but only paid out a total of $882,000 to investors.  Cameron misappropriated the funds to support his luxurious lifestyle, including buying property, cars, a horse, and a $75,000 cruise in the Bahamas. He also transferred funds offshore to Barbados.

A Canada Revenue Agency (CRA) investigation proved that Cameron diverted $3.9 million of the investors’ funds for his own use and failed to report this as income on his tax returns, evading $1,132,882 in taxes.

“I have no doubt whatsoever that [Cameron] executed a deceptive investment scheme with subjective knowledge of the prohibited act and consequences,” said presiding judge, Justice P.R. Jeffrey, in his written reasons for convicting Cameron. “The CRA acted towards him with considerable patience, forbearance and fairness.  He was given ample opportunity to provide to CRA any plausible alternate explanation for what occurred, yet did not.”

Justice Jeffrey commented in his sentencing report: “The $1,831,700 I have ordered payable in restitution should be subtracted from his [Cameron] total taxable income… therefore I find his taxable income to have been $2,118,817.”

Cameron was convicted of tax evasion under the Income Tax Act and fraud under the Criminal Code.

Sentencing took place today at the Court of Queen’s Bench in Calgary.

You can report suspected tax evasion to the CRA by visiting https://www.canada.ca/en/revenue-agency/programs/about-canada-revenue-agency-cra/informant-leads-program.html or by calling the National Leads Centre at 1-866-809-6841.

All case-specific information in this news release was obtained from the court records.

Did you know that between April 1, 2012, and March 31, 2017, total domestic and offshore related criminal investigations have resulted in 408 convictions involving $122 million in federal tax evaded and court sentences totaling approximately $44 million in court fines and 3,103 months in jail?

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Tax Freedom Day, 2017. Working For Ourselves Now… Theoretically.

June 9, 2017 is Tax Freedom Day!

What is Tax Freedom Day?

Does it really exist?

What might it mean to me?

In their annual report, the Fraser Institute, a Vancouver-based think-tank added up all forms of taxation — from income and sales taxes, to more hidden costs such as gasoline taxes, carbon taxes, tobacco and alcohol taxes, municipal property taxes, payroll taxes and even CPP and EI premiums — to come up with a figure for the overall tax burden for Canadian families, and this year, they have determined that the average Canadian family with two or more people will earn $108,674 and pay 43.4% in taxes.

Based on the Fraser Institute math, 100% of income earned thus far in 2017 has been gobbled up by government in taxes, and only now are you working for yourself until the end of the year.

Last year, in 2016, it came a day earlier, on June 8th and because of variances in all types of taxes in different provinces, Tax Freedom Day differs across the country, ranging from May 21st in Alberta to June 25th in Newfoundland and Labrador.

One of the reasons for the extra day is to account for the fact that Canadians’ tax bill has risen, on average, by $1,126 this year, according to the Fraser Institute. Of that increase, $542, came from higher income taxes, but sales taxes (up $311) and other energy-related taxes (up $204) also took a bigger bite while liquor, tobacco, amusement, and other excise taxes, payroll and health taxes, and import duties all decreased.

The Ottawa-based Broadbent Institute, however, disputes the math behind the annual Fraser Institute report, because the Fraser Institutes uses “average” tax rates instead of median tax rates.

To come up with its “average” tax rates, the Fraser Institute simply adds up the amount of cash income earned by a taxpayer, and then divides that by the number of people. It then takes “outliers” and excludes those extremes from the calculations.

The Broadbent Institute said that skews the numbers in a certain way, and a better way than the average would be to use the median — the exact mid-point between the top and bottom and the rationale behind this surrounds the fact that the average income of Canada will always be higher than the median because of the small number of very high-income earners in Canada, which skews the average income amount higher.

Adding up only federal and provincial income taxes, the “average” Canadian in prime working years (between 25 – 54 years of age) earned $62,600 last year, and paid $12,000 in taxes, or around 19%, according to tax filings. Using the Broadbent method of calculation, the median for that group earned $50,500 last year and paid $7,000, or 14%, in income taxes.

Another main difference is that the figures used by Fraser Institute report doesn’t just include income taxes. It tabulates all sorts of fees that taxpayers don’t directly pay, such as payroll taxes and resource royalties that companies pay when they extract things like oil, minerals and timber.

It also only considers what it calls “cash income” on the other side of the ledger. That excludes employee benefits, investment income from pension plans and other forms of cash income.

The Fraser report also takes into consideration indirect costs like payroll taxes and other taxes which businesses pay in their calculations because even though businesses pay these taxes directly, the cost of business taxation is passed on to Canadians.

So now that we’re working for ourselves, let’s push all levels of government to treat our tax dollars more wisely, and let’s earn as much as possible (while continuing to pay our taxes on time!)

IRS Releases 2011 Tax Rates

Below is the IRS press release identifying the 2011 Adjusted tax rates, effective January 1, 2011.

SECTION 1. PURPOSE
This revenue procedure sets forth inflation adjusted items for 2011. Other inflation adjusted items for 2011 are in Rev. Proc. 2010-40, 2010-46 I.R.B. 663 (dated November 15, 2010).

SECTION 2. 2011 ADJUSTED ITEMS
Tax Rate Tables.

For taxable years beginning in 2011, the tax rate tables under § 1 are as follows:
TABLE 1 – Section 1(a) – Married Individuals Filing Joint Returns and Surviving Spouses
If Taxable Income Is: The Tax Is:
Not over $17,000 10% of the taxable income
Over $17,000 but $1,700 plus 15% of
not over $69,000 the excess over $17,000
Over $69,000 but $9,500 plus 25% of
not over $139,350 the excess over $69,000
Over $139,350 but $27,087.50 plus 28% of
not over $212,300 the excess over $139,350
Over $212,300 but $47,513.50 plus 33% of
not over $379,150 the excess over $212,300
Over $379,150 $102,574 plus 35% of
the excess over $379,150

TABLE 2 – Section 1(b) – Heads of Households
If Taxable Income Is: The Tax Is:
Not over $12,150 10% of the taxable income
Over $12,150 but $1,215 plus 15% of
not over $46,250 the excess over $12,150
Over $46,250 but $6,330 plus 25% of
not over $119,400 the excess over $46,250
Over $119,400 but $24,617.50 plus 28% of
not over $193,350 the excess over $119,400
Over $193,350 but $45,323.50 plus 33% of
not over $379,150 the excess over $193,350
Over $379,150 $106,637.50 plus 35% of
the excess over $379,150

TABLE 3 – Section 1(c) – Unmarried Individuals (other than Surviving Spouses and Heads of Households)

If Taxable Income Is: The Tax Is:
Not over $8,500 10% of the taxable income
Over $8,500 but $850 plus 15% of
not over $34,500 the excess over $8,500
Over $34,500 but $4,750 plus 25% of
not over $83,600 the excess over $34,500
Over $83,600 but $17,025 plus 28% of
not over $174,400 the excess over $83,600
Over $174,400 but $42,449 plus 33% of
not over $379,150 the excess over $174,400
Over $379,150 $110,016.50 plus 35% of
the excess over $379,150

TABLE 4 – Section 1(d) – Married Individuals Filing Separate Returns
If Taxable Income Is: The Tax Is:
Not over $8,500 10% of the taxable income
Over $8,500 but $850 plus 15% of
not over $34,500 the excess over $8,500
Over $34,500 but $4,750 plus 25% of
not over $69,675 the excess over $34,500
Over $69,675 but $13,543.75 plus 28% of
not over $106,150 the excess over $69,675
Over $106,150 but $23,756.75 plus 33% of
not over $189,575 the excess over $106,150
Over $189,575 $51,287 plus 35% of
the excess over $189,575

TABLE 5 – Section 1(e) – Estates and Trusts
If Taxable Income Is: The Tax Is:
Not over $2,300 15% of the taxable income
Over $2,300 but $345 plus 25% of
not over $5,450 the excess over $2,300
Over $5,450 but $1,132.50 plus 28% of
not over $8,300 the excess over $5,450
Over $8,300 but $1,930.50 plus 33% of
not over $11,350 the excess over $8,300
Over $11,350 $2,937 plus 35% of
the excess over $11,350

Child Tax Credit.

For taxable years beginning in 2011, the value used in § 24(d)(1)(B)(i) to determine the amount of credit under § 24 that may be refundable is $3,000.

Hope Scholarship, American Opportunity, and Lifetime Learning Credits.
(1) For taxable years beginning in 2011, the Hope Scholarship Credit under
§ 25A(b)(1), as increased under § 25A(i) (the American Opportunity Tax Credit), is an amount equal to 100 percent of qualified tuition and related expenses not in excess of $2,000 plus 25 percent of those expenses in excess of $2,000, but not in excess of $4,000. Accordingly, the maximum Hope Scholarship Credit allowable under § 25A(b)(1) for taxable years beginning in 2011 is $2,500.
(2) For taxable years beginning in 2011, a taxpayer’s modified adjusted gross income in excess of $80,000 ($160,000 for a joint return) is used to determine the reduction under § 25A(d)(2) in the amount of the Hope Scholarship Credit otherwise allowable under § 25A(a)(1). For taxable years beginning in 2011, a taxpayer’s modified adjusted gross income in excess of $51,000 ($102,000 for a joint return) is used to determine the reduction under § 25A(d)(2) in the amount of the Lifetime Learning Credit otherwise allowable under § 25A(a)(2).

Earned Income Credit.
(1) In general. For taxable years beginning in 2011, the following amounts are used to determine the earned income credit under § 32(b). The “earned income amount” is the amount of earned income at or above which the maximum amount of the earned income credit is allowed. The “threshold phaseout amount” is the amount of adjustedgross income (or, if greater, earned income) above which the maximum amount of the credit begins to phase out. The “completed phaseout amount” is the amount of adjusted gross income (or, if greater, earned income) at or above which no credit is allowed. The threshold phaseout amounts and the completed phaseout amounts shown in the table below for married taxpayers filing a joint return include the increase provided in § 32(b)(3)(B)(i), as adjusted for inflation for taxable years beginning in 2011.

Number of Qualifying Children
Item One Two Three or More None
Earned Income $9,100 $12,780 $12,780 $6,070
Amount
Maximum Amount of Credit $3,094 $5,112 $5,751 $464
Threshold Phaseout $16,690 $16,690 $16,690 $7,590
Amount (Single, Surviving Spouse, or Head of Household) Completed Phaseout $36,052 $40,964 $43,998 $13,660
Amount (Single, Surviving Spouse, or Head of Household) Threshold Phaseout $21,770 $21,770 $21,770 $12,670
Amount (Married Filing Jointly)Completed Phaseout $41,132 $46,044 $49,078 $18,740
Amount (Married Filing Jointly)
The instructions for the Form 1040 series provide tables showing the amount of the earned income credit for each type of taxpayer.
(2) Excessive investment income. For taxable years beginning in 2011, the earned income tax credit is not allowed under § 32(i) if the aggregate amount of certain investment income exceeds $3,150.

Standard Deduction.
(1) In general. For taxable years beginning in 2011, the standard deduction amounts under § 63(c)(2) are as follows:
Filing Status Standard Deduction
Married Individuals Filing Joint Returns $11,600
and Surviving Spouses (§ 1(a))
Heads of Households (§ 1(b)) $8,500
Unmarried Individuals (other than Surviving Spouses $5,800
and Heads of Households) (§ 1(c))
Married Individuals Filing Separate $5,800
Returns (§ 1(d))
(2) Dependent. For taxable years beginning in 2011, the standard deduction amount under § 63(c)(5) for an individual who may be claimed as a dependent by another taxpayer cannot exceed the greater of (1) $950, or (2) the sum of $300 and the individual’s earned income.
(3) Aged or blind. For taxable years beginning in 2011, the additional standard deduction amount under § 63(f) for the aged or the blind is $1,150. These amounts are increased to $1,450 if the individual is also unmarried and not a surviving spouse.

Qualified Transportation Fringe. For taxable years beginning in 2011, the monthly limitation under § 132(f)(2)(A), regarding the aggregate fringe benefit exclusion amount for transportation in a commuter highway vehicle and any transit pass, and under
§ 132(f)(2)(B), regarding the fringe benefit exclusion amount for qualified parking, is $230.

Personal Exemption.
(1) Exemption amount. For taxable years beginning in 2011, the personal exemption amount under § 151(d) is $3,700.

Interest on Education Loans. For taxable years beginning in 2011, the $2,500 maximum deduction for interest paid on qualified education loans under § 221 begins to phase out under § 221(b)(2)(B) for taxpayers with modified adjusted gross income in excess of $60,000 ($120,000 for joint returns), and is completely phased out for taxpayers with modified adjusted gross income of $75,000 or more ($150,000 or more for joint returns).

SECTION 3. EFFECTIVE DATE
This revenue procedure applies to taxable years beginning in 2011.

Reporting income earned outside Québec to the MRQ

If you worked outside Québec, you must report employment income earned outside the province. Please follow the instructions below:

Check the appropriate box if you worked outside Canada.
If the income was earned in Canada and you did not receive an RL-1 slip, check the appropriate box and enclose a copy of your T4 slip with your return.
If you are in either of the above situations, complete Schedule R to find out whether you are required to pay a Québec parental insurance plan (QPIP) premium.

Income earned while you were not resident in Canada
If you were not resident in Canada throughout the year, enter the total income that you earned during the period in which you were not resident in Canada and that is not subject to Québec income tax.

If you earned no income during this period, enter “nil” in the appropriate box.

Family income
If you or your spouse on December 31, 2008 did not reside in Canada throughout the year, you must include in your family income, all of the income that you and your spouse earned, including income earned while you were not resident in Canada.

If your spouse was resident in Canada, outside Québec, you must take into account his or her income for the entire year.

Amounts earned in foreign currency
These amounts must be reported in Canadian dollars. To convert the amounts, use the exchange rate in effect at the time you earned them.

You may use the average exchange rate for the year if the amounts were received over the entire year. For information on the exchange rate, consult the Bank of Canada website.