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August 26, 2013
Saskatchewan construction firm owner charged for tax evasion
A man from Bienfait, Saskatchewan, who owns Jake's Oilfield Construction Ltd., was fined and sentenced to jail for tax evasion in Estavan provincial court.
The Canada Revenue Agency (CRA) recently announced that Jerry Leroy McCaw, 58, was found guilty of evading federal income taxes totalling $114,924.
He failed to report employment income totalling $548,044 paid to him in 2006, 2007 and 2008 by Jake’s Oilfield Construction Ltd., a corporation he owned and controlled.
The corporation was also found guilty of assisting him to evade taxes.
The Court was told that McCaw changed his status from employee to that of a subcontractor so that Jake’s Oilfield Construction Ltd. would no longer issue him a T4 slip.
As a result, Jake’s Oilfield Construction Ltd., was fined $264,335 for tax evasion and McCaw was sentenced to a 14-month jail term.
The court fined McCaw $164,728 and Jake’s Oilfield Construction Ltd. $99,607 for a total fine of $264,335, which represents 100 per cent of the tax evaded.
Evidence provided to the Court showed that McCaw paid fees over a two-year period to Gerald Blerot, an “educator” with the Paradigm Education Group operated by Russell Porisky.
McCaw adopted Paradigm’s beliefs to argue that, as a “natural person”, he was not subject to the Income Tax Act. He did not seek out reputable professional advice regarding these beliefs.
Blerot is currently before the courts in Saskatchewan, charged with tax evasion and aiding, abetting and counseling others to commit tax evasion.
Porisky was convicted in the Supreme Court of B.C. on Jan. 18, 2013 of tax evasion and counseling others to commit tax evasion.
The CRA is warning Canadians to beware of individuals who try to convince you that tax does not have to be paid on the income they earn.
These tax protesters not only fail to report their own earnings, but they also conspire, counsel, and promote these tax schemes.
When individuals are convicted of income tax and GST evasion, they must still repay the full amount of taxes owing, plus interest and any civil penalties that may be assessed by the CRA.
In addition, the court may fine them up to 200 per cent of the taxes evaded and impose a jail term of up to five years.
Taxpayers who have not filed returns for previous years, or who have not reported all of their income, can still voluntarily correct their tax affairs.
They may not be penalized or prosecuted if they make a valid disclosure before they become aware of any compliance action being initiated by the CRA against them.
These taxpayers may only have to pay the taxes owing, plus interest.
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