Tax Evasion Sentencing – Voluntary Disclosure to Avoid Jail
Tax evasion has become organized business and is sold and even franchised to Canadian public taxpayers. However the founders of 2 different tax evasion schemes that were widely marketed in Canada have recently been jailed.
Mr. Russell Porisky is the founder of Paradigm Education Group and In late July 2016 he was sentenced to five and a half years in jail, and a fine of $259,482 for counseling others to commit income tax evasion and for his own income tax evasion.
The owner and operator of Fiscal Arbitrators, Lawrence Watts of Markham, Ontario was sentenced this past June to six years imprisonment plus a fine of $149,129. Fiscal Arbitrators or FA was another heavily marketed Canadian tax evasion scheme is it was also operated as a franchise using DSC Lifestyles Services.
Both of Paradigm and Fiscal Arbitrators are businesses which counseled taxpayers across Canada to commit tax fraud through income tax evasion. Paradigm in effect operated through a multi-level marketing organization or franchise model and sold products and organized and taught fee charging seminars which instructed Canadians on how to improperly structure their affairs in a way to illegally avoid taxes, in other words to commit criminal tax evasion. Paradigm follows the teachings of certain tax protestor groups or de-taxers that "natural persons" do not have to pay income tax, a discredited theory referred to as "nonsense" by the courts. Fiscal Arbitrators had no false tax theories to rely on – they just sold non-existent tax losses.
These tax evasion schemes have serious implications for Canadian taxpayers. Over 30 individuals have been convicted of criminal tax evasion and received significant tax fines and jail sentences directly related to their participation with Paradigm, and others have been convicted of tax evasion due to Fiscal Arbitrators . This includes a Paradigm “franchisee” Donald Baudais who was sentenced in 2014 to tax fines equal to 100% of tax and GST evaded, and to 6 months imprisonment, for promoting Paradigm, even though his spouse was suffering at the time from the aftermath of brain cancer.
Many honest Canadians have fallen victim to these tax evasion schemes and have ended up having to pay tax fines for tax fraud. If you have participated in a tax evasion scheme but have not been audited by CRA you may qualify for the CRA Voluntary Disclosure Program (VDP) or tax amnesty. Even if you deliberately committed income tax fraud you can still apply for voluntary disclosure tax relief and avoid tax prosecution and tax penalties. Our Canadian tax law firm has helped individuals and businesses who were duped into tax denier tax evasion schemes, including some who have served jail time, to come back into the Canadian income tax system.
Disclaimer:
"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."
Certified by the Law Society of Ontario as a specialist in Taxation Law