False invoicing: Two Québec City companies and their administrator guilty of tax fraud
QUÉBEC CITY, Oct. 25, 2013 /CNW Telbec/ - Two companies, Construction Canadienne 2000 Inc. and 2967-0957 Quebec Inc., and their administrator, Jean Thériault, pleaded guilty to tax evasion charges today before the Court of Quebec in Québec City. They were fined $70,851, $18,075 and $119,027 respectively, which represents 50% of the federal tax they tried to evade. In addition to these fines, they will have to pay the full amount of tax owing, plus related interest and any penalties that apply.
The Canada Revenue Agency (CRA) investigation revealed that, for the 2007 and 2008 tax years, the accused voluntarily contravened the Income Tax Act by setting up a false invoicing scheme. To do so, Jean Thériault asked some suppliers to incorrectly invoice Construction Canadienne 2000 Inc. and 2967-0957 Quebec Inc. for the construction of his personal residence. The scheme enabled those companies to falsely reduce their revenues by deducting expenses totalling $862,081 in their corporate income tax returns.
The CRA investigation also revealed that, for the same tax years, Jean Thériault claimed $983,093 of his company's monies as his own - equivalent to the deducted expenses plus taxes - and failed to report this amount in his personal income tax returns, therefore trying to avoid paying the federal income tax on that amount.
The above information was obtained from the court records.
The CRA pursues tax evaders to maintain public confidence in the integrity of the tax system. Canadians have to trust that our self-assessment system is working and that it is fair.
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 taken by the CRA against them. These taxpayers may only have to pay the taxes owing, plus interest. More information on the Voluntary Disclosures Program can be found at www.cra.gc.ca/voluntarydisclosures.
Additional information on convictions can be found on the Media page of the CRA Web site at www.cra.gc.ca/convictions.
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