Kingston accountant sentenced for assisting client in tax protester scheme

The Canada Revenue Agency (CRA) announced that, on September 23, 2019, Douglas Hubert Raymond (Raymond) of Kingston, Ontario, was sentenced in the Ontario Court of Justice in Ottawa to an eighteen month conditional jail sentence for which the first six months are served under house arrest, 240 hours of community service, a $34,432 fine and a three year term of probation. Raymond, an accountant, pleaded guilty on the same day to one count of assisting his client in obtaining Goods and Services Tax Credit (GSTC) and Canada Child Tax Benefit (CCTB) payments to which his client was not entitled.

A CRA investigation found that Raymond prepared the tax returns of Kin Tung Fong (Fong) of Ottawa, Ontario for the years 2008 to 2012. In those tax returns, Raymond assisted Fong with reporting income from his dentistry practice totalling $2,045,572, but then wrongfully deducting the entire amount as a business expense, under "Private Contracts". Based on Fong's falsely declared family net income, Fong and his spouse received a total of $34,432 in GSTC and CCTB payments to which they were not entitled.

This tax evasion scheme was promoted by a tax protester organization known as the Paradigm Education Group followed by both Raymond and Fong.

On January 17, 2019, Fong was sentenced in the Ontario Court of Justice in Ottawa to a conditional jail sentence of two years less a day, including 12 months of house arrest, and a curfew for the remainder of the sentence. Fong pleaded guilty on the same day to one count each of tax fraud and laundering proceeds of crime under the Criminal Code.

All case-specific information above was obtained from the court records.

All Canadians should be wary of "tax protesters" who try to convince the public that they do not have to pay tax on earned income. For those involved in tax protester schemes, the CRA will reassess income tax, calculate interest and impose penalties. The court can also impose a fine between 50% and 200% of the tax evaded and a jail term of up to five years. More information on tax protester schemes is available on CRA's website at Canada.ca/tax-alert.

To maintain the fairness of our tax system, the CRA holds tax evaders, and those that facilitate tax evasion, accountable for their actions. For the five-year period between April 1, 2014, and March 31, 2019, the courts convicted 25 tax preparers/promoters for tax evasion, both personally and for actions on behalf of clients. The courts sentenced the tax preparers/promoters to a total of $2.5 million in fines and 38 years of jail time.

The CRA has set up a free subscription service to help Canadians stay current on the CRA's enforcement efforts.

Associated Links

• Leads Program
• Voluntary Disclosures Program

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Contact

Paul N Murphy
Senior Communications Advisor
416-952-8105