Here is a recent bulletin from CRA dealing with the problem of fraudulent official donation receipts.
Canada Revenue Agency
Feb 07, 2020, 16:33 ET
TORONTO, Feb. 7, 2020 /CNW Telbec/ – The Canada Revenue Agency (CRA) announced that George Nkoke Nnane (Nnane) of Richmond Hill, Ontario was sentenced on February 6, 2020 in the Superior Court of Justice in Toronto to three years in jail on one count of fraud under the Criminal Code of Canada, and to 12 months in jail on a second count of fraud under the Criminal Code of Canada, to be served concurrently. Nnane was found guilty by a jury of these charges on October 29, 2019.
A CRA investigation revealed that Nnane, the Chief Executive Officer of a tax preparation business, Golden Capital Management Inc. (GCMI), prepared individual tax returns for GCMI’s clients with false charitable donations credits, as well as fictitious business and rental losses. These false claims enabled GCMI’s clients to evade a total of $1,971,212 in federal tax for the taxation years 2009 to 2013 inclusive.
The investigation also revealed that GCMI did not report net income totalling $503,138 on its corporate income tax returns for the taxation years 2009 to 2013 inclusive, and failed to remit goods and services tax/harmonized sales tax (GST/HST) totalling $52,701 for the quarterly filing periods from 2009 to 2013 inclusive.
All case-specific information above was obtained from the court records.
To maintain the fairness of our tax system, the CRA holds tax evaders, and those that facilitate tax evasion, accountable for their actions. For the five-year period between April 1, 2014, and March 31, 2019, the courts convicted 25 tax preparers/promoters for tax evasion, both personally and for actions on behalf of clients. The courts sentenced the tax preparers/promoters to a total of $2.5 million in fines and 38 years of jail time.
Willfully failing to follow tax laws could result in serious consequences, including reassessments, the imposition of civil penalties and criminal tax investigations and prosecutions resulting in the imposition of court fines and jail time. Under the income tax and excise tax laws, persons convicted of tax evasion will face fines ranging from 50% to 200% of the evaded taxes and up to five years imprisonment. If convicted of fraud under Section 380 of the Criminal Code, an individual can face up to 14 years in jail.
By Mark Blumberg, Blumbergs
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