Keith David Lawson, Another Tax Protester, Sentenced to Jail in Tax Prosecution
In what is becoming a very familiar situation another self styled educator with the Paradigm Education Group tax protester movement (actually more of a de-taxer franchise) has been sentenced to a jail term for tax evasion and counselling others to evade as a result of a successful tax prosecution.
Mr. Keith David Lawson of Burnaby, B.C., was the latest tax protester to be sentenced to incarceration when the BC Supreme Court ordered a six month jail term for each of two counts of tax evasion on Oct. 31, 2016. He was also committed to 12 months in jail to be served consecutively for one count of counselling others to evade taxes and was handed a tax fine of $30,717.
The Canada Revenue Agency (CRA) makes a point of publicizing tax prosecution convictions for tax evasion, and is very concerned with discrediting tax protestors or de-taxers. The tax proseuction convictions and jail and tax fine sentences came after a CRA criminal tax fraud investigation that found Lawson failed to report total income of $159,629 for the 2004 to 2008 years, thereby evading $18,036 in federal income taxes. He also failed to remit $12,681 in Goods and Services Tax (GST) on his earnings for the 2005 to 2008 tax years.
The Paradigm Education Group is a tax protest scheme founded by Russell Porisky of Chilliwack, BC. Porisky heavily marketed the Paradigm Education Group both through seminars conducted by “educators” and over the internet, such as in YouTube videos. Porisky through the Paradigm Education Group said that “income tax is nothing more than an internal federal excise tax which is only mandatory for those who choose to work as a legal representative, under an implied contract of service, for the benefit of a federally created legal (artificial) person known as a ‘taxpayer.’”
This de-taxer scheme based on a so-called "natural person" argument has been found to be without any merit by every court that has examined it. Participants have all been convicted of tax evasion and many have been sentenced to jail terms. Mr. Porisky himself was sentenced to four years in jail and ordered to pay tax fines of $260,000. Elaine Gould, his partner, was sentenced to one day in jail and fined an amount of $38,242.
Our experienced Vancouver tax lawyers have experience with tax protester schemes and arguments and have helped de-taxers avoid tax prosecution and come back into the tax system through a CRA voluntary disclosure (VDP or tax amnesty). The CRA voluntary disclosure program allows Canadian taxpayers who have committed a tax wrong, such as failure to file tax returns or deliberate tax evasion by not reporting income, to avoid tax prosecution and civil tax penalties. Taxpayers have to approach CRA, through our top Vancouver tax lawyers, on a voluntary basis before CRA commences a tax audit or tax prosecution investigation. By making a tax lawyer initiated CRA voluntary disclosure the Canada Revenue Agency will not prosecute for tax evasion and will not levy civil tax penalties.
What is considered tax evasion?
Tax evasion consists of intentionally ignoring or avoiding Canada’s tax laws. Both individuals and businesses can be guilty of tax evasion.
Actions such as purposely failing to report partial or complete income, falsifying records, hiding assets, and inflating expenses are all prosecution-worthy activities.
While some people and businesses may not commit this crime intentionally, they can still be held liable if the CRA discovers that they have paid artificially low taxes or failed to pay at all for any given year.
How long can you legally go without filing taxes in Canada?
Legally, if you receive income above $500, you are required to file taxes annually.
While the chances of the government coming after a regular individual with an average income for missing one year’s worth of tax filings is very low, it is technically possible.
The longer you go without filing taxes, the more likely you are to garner the attention of the CRA. You will also be liable for higher penalties and more interest charges, the longer you avoid paying. The best thing to do is to apply for the Voluntary Disclosure Program if you have failed to pay adequate taxes any time within the last ten years.
What happens if you are found guilty of tax evasion in Canada?
If you are found guilty of tax evasion, several things will happen. You will be required to pay back the entire amount of money that you owe the government. You will also have to pay additional money in the form of accrued interest and civil penalties. The courts also have the right to fine you up to 200% of the amount of taxes you failed to pay. Lastly, you could be sent to jail for up to five years.
"These articles provide information of a general nature only. It is only current at the posting date. It is not updated and it may no longer be current. It does not provide legal advice nor can it or should it be relied upon. All tax situations are specific to their facts and will differ from the situations in the articles. If you have specific legal questions you should consult a lawyer."