Tax Schemes

I’m on CRA’s enforcement notifications email and this one just came out. The person charged, convicted and jailed under this enforcement, Festus Bayden (his partner Eric Armah was convicted in 2011 and sentenced to 3 years in prison) was a tax preparer who provided clients fraudulent charity tax receipts totaling more than $34 million over the 2004 – 2006 tax years. I wasn’t able to find the Ontario Court of Justice case for the tax preparer in this case but was able to find a Tax Court of Canada case regarding the reassessment of tax made by the CRA when they uncovered the scheme and reassessed a taxpayer who had taken part in and benefited from it. Needless to say, the judge did not buy in any way that the taxpayer had charitable intentions and had unknowingly participated in the scheme. The assessments by the CRA were upheld and all of the amounts claimed + penalties and interest had to be paid by the taxpayer. This would have been the case by every single taxpayer who engaged in the scheme.