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No getting away with tax evasion
June 13, 2012 An Alida, Sask., couple have learned the hard way that the Canada Revenue Agency (CRA) does not tolerate tax evasion and does not shy away from seeking onerous penalties. On May 14, the Estevan Provincial Court meted out hefty fines and jail time to Alida residents Norman Luke Desautels and Dorothy-Anne Denise Desautels for tax evasion.
Norman Desautels was sentenced to one year in jail and fined $105,922.47. His wife, Dorothy-Anne, was sentenced to six months in jail and fined $99,548.80.
The couple was given five years to pay the fines, which represent 100% of the taxes that the Desautels sought to evade. As well, the Desautels have to pay the outstanding taxes and the benefits that they received.
On Feb. 27, 2012, the Desautels were found guilty of failing to report income from their farm, surface leases and a family trust. Norman also failed to report income from his oil-well servicing business. Nor did the couple report income of $494,671.36, earned from 2004 to 2008; they also evaded personal income taxes of $90,679.80. In doing so, Dorothy-Anne received $8,869 in Canada child tax benefits to which she was not entitled. Norman collected GST from his customers that he did not remit, totaling $6,373.67 for the period 2005 to 2008.
Don't confuse tax avoidance with tax evasion. As the Desautels discovered, tax evasion — which involves the non-declaration or falsification of tax-related information — is illegal. Tax avoidance, which involves using specific transactions to lower the amount of taxes payable as a result of a technical reading and application of the law, is not; in some cases, however, the courts may later deny the tax benefit.
If you are concerned about your own tax-filing liabilities, remember the CRA's Voluntary Disclosures Program. The CRA allows taxpayers to correct inaccurate or incomplete tax-related information, or to disclose information they omitted to report to the Agency, in some cases without facing prosecution or fines.
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