Here is a CRA press release on a Toronto tax preparer who has pled guilty in a tax fraud scheme involving false donation receipts
Canada Revenue Agency News Release
Toronto tax preparer pleads guilty in tax fraud scheme
Toronto, Ontario, September 14, 2010…On September 14, 2010, Faiz Khan of Markham, pled guilty in the Ontario Court of Justice in Toronto to one count of fraud over $5,000. Khan participated in a tax scheme that involved the preparation and filing of false tax returns claiming a total of $2 million of false donation claims. Sentencing is scheduled to take place on October 26, 2010. Individuals convicted of the Criminal Code offence of fraud face a maximum jail term of 14 years.
An investigation by the Canada Revenue Agency (CRA) revealed that Khan, as a tax preparer, prepared 118 false tax returns, which included the use of falsified donation documents, on behalf of 52 clients for the tax years 2004 to 2008. The false claims totalled $1,991,961 for the years noted, and resulted in Khan’s clients understating their federal taxes payable by $575,971 and receiving increased income tax refunds to which they were not entitled.
The five charities whose names appeared on the falsified donation were: Faith Full Gospel Tabernacle, City Chapel Ministries International, Destiny Ministries International Christian Mission, Pan African Canadian Multicultural Centre, and Ave Development Foundation.
In addition Khan also filed fraudulent tax returns for the years 2004 to 2007 for himself, which also included false donation claims and unreported income from his business. During the course of this investigation, CRA determined that Khan failed to report $984,594 in income from his tax preparation business for the years 2004 to 2008, thereby evading the payment of $249,000 in tax.
Individuals 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 will not be penalized or prosecuted if they make a valid disclosure before they become aware of any compliance action being initiated by the CRA against them. These individuals may only have to pay the taxes owing, plus interest. More information on the Voluntary Disclosures Program (VDP) can be found on the CRA’s website at http://www.cra.gc.ca/voluntarydisclosures.
The information in this news release was obtained from the court records.
Further information on convictions can also be found in the Media room on the CRA website at http://www.cra.gc.ca/convictions.
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Mark Blumberg is a partner at the law firm of Blumberg Segal LLP in Toronto and works almost exclusively in the areas of non-profit and charity law.