What the CRA Said

Canada Revenue Agency Enforces Tax Integrity:  A Recent Conviction Highlights the Importance of Accurate Tax Filings

In a recent enforcement action that underscores the importance of integrity within Canada’s tax system, the Canada Revenue Agency (CRA) has brought to light a significant case of tax evasion. Monique Van Dijk of Calgary, Alberta, faced the consequences of her actions in the Alberta Court of Justice on November 16, 2023, following a guilty plea to a charge of making false or deceptive statements on a tax return, in violation of the Income Tax Act.

Van Dijk was subjected to a stern penalty for her actions, including a $116,000 fine. Additionally, she received a conditional sentence order comprising 12 months of house arrest, followed by a 12-month probation period. This sentence reflects the seriousness with which the Canadian legal system treats tax evasion and fraud.

The CRA’s thorough investigation into Van Dijk’s activities revealed that she had filed over 200 T1 tax returns and numerous “change my return” requests between March 2016 and July 2019 for more than 50 taxpayers. A significant portion of these filings contained false statements and claims aimed at unlawfully obtaining the Working Income Tax Benefit among other refunds. These deceitful actions led to the issuance of excessive or unwarranted refunds, undermining the fairness of Canada’s tax system.

Publicizing convictions for tax evasion and fraud is part of the CRA’s strategy to uphold the integrity of the self-assessment tax system and to deter potential offenders by demonstrating the tangible consequences of such crimes. This approach is essential for maintaining public confidence in the tax system and ensuring the equitable distribution of tax obligations.

Convicted individuals are required to repay the full amount of taxes owed, in addition to interest and any penalties assessed by the CRA. This serves as a reminder of the importance of accurate and honest tax filings.

The CRA remains committed to safeguarding the integrity of the national tax system, a cornerstone of Canada’s social and economic health. By vigilantly pursuing instances of tax evasion and false claims, the CRA ensures that individuals and businesses contribute their fair share, supporting vital benefit programs and services that enhance the quality of life for all Canadians.

To further its commitment to transparency and public education, the CRA offers a free subscription service that keeps Canadians informed about the agency’s enforcement actions and efforts to combat tax evasion. This service is part of the CRA’s broader initiative to ensure all Canadians are aware of the consequences of tax evasion and the importance of compliance with tax laws.

For more information on the repercussions of tax evasion and how the CRA enforces tax laws, or to subscribe to the CRA’s enforcement updates, visit the official CRA website and navigate to the Tax Evasion section. This resource is designed to help Canadians understand their tax obligations and the significance of maintaining the integrity of the tax system.

Canada Revenue Agency Secures Conviction in Major Tax Fraud Case Involving Temporary Staffing Agencies

The Canada Revenue Agency (CRA) has successfully concluded a significant tax fraud case, underscoring its ongoing commitment to preserving the integrity of Canada’s tax system. Sung Oh Chung, from Thornhill, Ontario, received a conditional sentence and a substantial fine after his guilty plea was entered for tax fraud charges, emphasizing the severe consequences of violating tax laws.

On September 12, 2023, at the Toronto Courthouse, Chung was handed a conditional sentence of two years less a day, coupled with a fine of $681,235, following his admission of guilt on March 21, 2023, for committing fraud over $5,000 under the Criminal Code. This sentence reflects the seriousness of Chung’s actions, which resulted in significant tax evasion.

The CRA’s thorough investigation into Chung’s financial activities revealed that between 2012 and 2016, he had not reported personal income totaling $2,310,678. This unreported income stemmed from undeclared sales and the evasion of Goods and Services Tax/Harmonized Sales Tax related to the operations of Sovereign Staffing Inc. (SSI) and Talent Savvies Inc. (TSI), where Chung held a directorship. By diverting funds from multiple business bank accounts—of which only one was disclosed to the CRA—Chung was able to evade taxes amounting to $681,325.

As part of his sentence, Chung was obligated to pay $500,000 within 24 hours of his sentencing, with the remainder due by September 11, 2025. This case serves as a reminder of the financial and legal repercussions that can arise from failing to comply with tax obligations.

Chung’s business associate, Kwang Won Lee, also faced legal repercussions for similar offenses, highlighting the broader implications of tax evasion within the business community.

Tax evasion undermines the fairness and integrity of the tax system, affecting the social and economic well-being of all Canadians. The CRA remains vigilant in its efforts to detect and prosecute tax fraud, utilizing a wide range of tools and resources. In the fiscal year from April 1, 2022, to March 31, 2023, the CRA secured 31 convictions for tax evasion, with court-imposed fines totaling $6,925,440 and sentences amounting to over 32 years in jail.

This conviction serves as a stark warning to individuals and businesses alike about the importance of accurate income reporting and compliance with tax laws. The CRA is dedicated to ensuring that all taxpayers meet their obligations, thereby supporting the administration of crucial benefit programs and maintaining the health of Canada’s tax system.

For more information on the consequences of tax evasion and the CRA’s enforcement efforts, visit the official CRA website. The CRA also offers a free subscription service to keep Canadians informed about its latest enforcement actions and initiatives to combat tax evasion, reinforcing its commitment to transparency and accountability.

This information is for discussion purposes only and should not be considered professional advice. There is no guarantee or warrant of information on this site and it should be noted that rules and laws change regularly. You should consult a professional before considering implementing or taking any action based on information on this site. Call our team for a consultation before taking any action. ©2024 Shajani CPA.

Shajani CPA is a CPA Calgary, Edmonton and Red Deer firm and provides Accountant, Bookkeeping, Tax Advice and Tax Planning service.