Jail Time for Counselling Tax Evasion
From the Canada Revenue Agency
The Canada Revenue Agency (CRA) announced on August 5 that Russell Porisky of Chilliwack, British Columbia, was sentenced on July 29, 2016, in British Columbia Supreme Court. This was the second trial for Mr. Porisky and his common-law spouse, Elaine Gould, as their first conviction on January 18, 2012, was overturned on appeal. Mr. Porisky was sentenced to five and a half years in jail, less credit for time served following his previous conviction, and a fine of$259,482 for one count of counselling others to evade taxes and two counts of tax evasion. Ms. Gould was sentenced to one day in jail, after receiving six months credit for time served on a conditional sentence order following her previous conviction, and a fine of $38,241 for one count of tax evasion.
A CRA investigation determined that Mr. Porisky and Ms. Gould failed to report total income of $1,415,366 for the 2004 to 2007 tax years and, as a result, evaded $231,574 in federal income tax payable. In addition, Mr. Porisky failed to collect and remit $66,149 in goods and services tax for the 2004 to 2008 taxation years.
Mr. Porisky was the founder of the Paradigm Education Group (Paradigm), a business which counselled people across Canada to commit fraud by evading tax. Paradigm sold products (books, DVDs, and CDs), organized and taught fee-based seminars which educated people on how to structure their affairs in a way to illegally avoid taxes. To date, 31 individuals have been convicted of criminal tax evasion offences and received significant fines directly related to their participation with Paradigm.
The preceding information was obtained from the court records.
The CRA warns all Canadians to beware of individuals who try to convince you that Canadians do not have to pay tax on the income they earn. These individuals, also known as tax protesters, not only fail to report their own earnings, but they also conspire, counsel, and promote these tax schemes. Canadian courts have consistently rejected arguments made in these tax protester schemes. For those involved in tax protester schemes, the CRA will reassess income tax and interest, and charge penalties. Individuals who plan to use the tactics of tax protesters should know that this could have significant personal and financial consequences, including fines, imprisonment, or seizure of goods. More information on tax protester schemes is available on the CRA webpage at http://www.cra-arc.gc.ca/gncy/lrt/txprtstrs-eng.html.
When taxpayers are convicted of income tax evasion, they must still repay the full amount of taxes owing, plus interest and any civil penalties that may be assessed by the CRA. In addition, the court may fine them up to 200% of the taxes evaded and impose a jail term of up to five years.
If you have ever made a tax mistake or omission, the CRA is offering you a second chance to make things right through its Voluntary Disclosures Program (VDP). If you make a valid disclosure before you become aware that the CRA is taking action against you, you may only have to pay the taxes owing plus interest. More information on the
VDP can be found on the CRA’s website at www.cra.gc.ca/voluntarydisclosures.
Further information on convictions can also be found in the Media Room on the CRA website at www.cra.gc.ca/convictions.