Tax Audit Alert: Failure to Report Income Expensive

A business owner in Prince George, BC, Kewal Singh Raju (Raju), and his business, Raju Homes Ltd., plead guilty and were sentenced with hefty fines and jail time for income tax evasion. Raju was fined $113,164 and handed an 18 month Conditional Sentence Order. Raju Homes Ltd. was fined $74,366. The fines represent 75 percent of the taxes evaded.

An investigation by the CRA found that Raju received $233,012 in direct payments from several of Raju Homes Ltd.’s clients and deposited these amounts into his personal accounts without reporting them.

It was also found that Raju falsely claimed $297,470 in business expenses and input tax credits on behalf of his company for four houses built for himself and his immediate family members where no payment was made to Raju Homes Ltd.
Although the fines were large, it could be fairly said that Raju and Raju Homes Ltd. got off fairly easily, as the maximum penalty for these offences is 200 per cent of the tax evaded and a five-year jail term.

Source: http://www.cra-arc.gc.ca/nwsrm/cnvctns/bc/bc130228-eng.html