Ontario Contractor Pleads Guilty to Tax Evasion

The Canada Revenue Agency (CRA) has reported that a Vaughan, Ontario based, general contractor has been fined for evading GST/HST.

The press release by the CRA announces that Gilles Larocque of Nobleton, Ontario pleaded guilty to tax evasion. He was sentenced in the Ontario Court of Justice in Newmarket and fined a total of $301,125.

Larocque pleaded guilty on January 7, 2020, in the Ontario Court of Justice in Newmarket, Ontario to two counts of failing to report income by not filing income tax returns, thereby committing tax evasion under the Income Tax Act.

He also pleaded guilty to two counts of failing to remit Goods and Services Tax / Harmonized Sales Tax (GST/HST) under the Excise Tax Act.

A CRA investigation revealed that Larocque, who owned and operated a construction company in the Vaughan, Ontario area, provided general contracting work to clients that included dry walling, framing and ceiling tile installation for gas stations.

Larocque used several aliases and business names and charged clients for GST/HST, which he used for his personal expenses.

Larocque failed to report income in both 2013 and 2014 tax years and evaded a total of $180,401 in federal taxes.

He also failed to file GST/HST returns in both those years, totalling $120,724 in unremitted GST/HST.

The total amount of federal tax evaded and unremitted GST/HST for the years 2013 and 2014 was $301,125.

Charging GST/HST to clients and then keeping it for your own use is not only against the law, but it’s a pretty sketchy way to get another 13% of income. A common rule to avoid this from happening it to always make sure that you ask for a receive a receipt. The receipt pretty-much (but not always) ensures that the seller is reporting the GST/HST that they collect from you, and the income earned from your purchase.

 

 

Winnipeg insulation company to pay nearly $500K in fines and back taxes for tax evasion

The Canada Revenue Agency (CRA) has announced on their website that a Winnipeg-based insulation company has been fined after underreporting its taxable income by more than $1 million.

The CRA’s Investigators found irregularities in the books and records of Thermo Applicators Inc., such as, that the company’s president included personal expenses in the company’s books, including construction costs for a cabin near Kenora, Ont. and a vacation home in Mexico, as well as a fly-in fishing trip. None of these are eligible tax deductions.

Thermo pleaded guilty in Manitoba provincial court on May 21 to two counts of making false or deceptive statements in the 2009-14 tax years. The court found $1,139,000 million in taxable income went unreported, in addition to the claiming of ineligible expenses.

As a result, the company is being ordered to pay $190,142 in income tax and $47,611 of sales tax that should have been withheld. In addition to paying the taxes, the company was fined $237,753.

Once penalties and interest are added to the debt dating back to 2009 the balance will shoot up well over $500,000.

This conviction is a clear reminder that failing to declare income and claiming false expenses can be very costly should the CRA perform and audit and find it.

Keep good records, report all income and claim eligible expenses.