Want To Be Internet Famous? Just Cheat On You Taxes.

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I was originally going to make this a simple call for your stories. I thought it would be interesting to hear about any tax-related horror stories.

Instead, I decided to do a little research first. Maybe there would be a few good stories out there already that I could share with you.

What I came across was a bit shocking.

Did you know that the government publishes their tax evasion convictions online? I had no idea. One of the programs is called Project Trident. This is a program focused on tracking down
“Triple Threat Tax Fraud” namely “identity theft, charities‑related fraud, and tax preparer fraud.”

There are two separate sites that publish these convictions. The Project Trident convictions can be found here. They leave names out of the listings. The other site is here, and it lists tax evasion convictions, including real names.

I thought I’d include a couple of the Project Trident listings. I don’t feel right publishing peoples names, so you can go check the other stories out on your own.
May 1, 2008... A High River, Alberta tax preparer was fined $90,000 and sentenced to 18 months in jail after pleading guilty to tax evasion. A CRA investigation found that he advised clients to file false tax returns. Several clients were advised to create fictitious businesses to claim against their employment income, and others were advised to deduct personal expenses as business expenses.

October 11, 2007... A Calgary resident was sentenced to two years in jail and ordered to repay the $202,626 he defrauded from the CRA. He filed fraudulent tax returns for 34 non-existent corporations, 14 non-existent proprietorships, and 10 legitimate corporations. In doing so he used false incorporation certificates, filed false documents using ex-employees' names and social insurance numbers and, in the majority of cases, had no books and records to support the returns filed. In total, he fraudulently obtained $202,626 and attempted to obtain a further $230,492 of GST refunds to which he was not entitled.

The first one makes me mad. It’s an “expert’s” job to protect their clients from this kind of trouble. You go to an accountant or a lawyer to avoid making a mistake that would land you in jail, just the same way you go to a mechanic to avoid getting hurt because of a shoddy home repair. Maybe the clients were looking for ways to cheat the system, but I’d bet at least one of their clients were unaware of the legality of their actions.

The second one just makes me laugh. I know lots of people claim expenses they shouldn’t, but this is ridiculous. Seriously…34 non-existent corporations? 34?? How did they think they’d get away with that? Please tell me none of you would do this.

Do any of you have any horror stories? Maybe a bad audit, or a tax preparer trying to give you dangerous advice? Share away.