Edmonton business owner receives conditional sentence and over $157,000 fine for tax evasion

The Canada Revenue Agency (CRA) announced that Carlos Flores of Edmonton, Alberta, pleaded guilty on August 27, 2020, in the Provincial Court of Alberta, to one count of tax evasion under the Income Tax Act, and one count of tax evasion under the Excise Tax Act. Mr. Flores was ordered to serve a 12-month conditional sentence, and was fined a total of $157,403.

A CRA investigation revealed that Mr. Flores, sole proprietor of F. Canton Drywall and Insulation, intentionally underreported his taxable business income by $573,563 for the 2011, 2012, and 2013 tax years. Mr. Flores organized his affairs to run a cash-based business and avoid creating bank records. Mr. Flores did not maintain a bank account, and opted to use a payday loan company to conduct business financial transactions, from paying subcontractors with money orders, to cashing cheques received from clients. It was determined that Mr. Flores also underreported revenue on his Goods and Services Tax (GST) returns, and failed to report and remit $44,474 in GST he collected for the same three-year period.

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

Tax evasion is a crime. Falsifying records and claims, wilfully not reporting income, or inflating expenses can lead to criminal charges, prosecution, jail time, and a criminal record. From April 1, 2019, to March 31, 2020, there were 32 convictions, with 13 taxpayers sent to jail for a total of 18.5 years. These individuals were sentenced for wilfully evading payment of $7,427,090 in tax.

The CRA remains dedicated to maintaining the integrity of Canada’s tax system, as well as the social and economic well-being of Canadians during these unprecedented times. The CRA continues to aggressively pursue tax evasion and false claims with all tools available to them. The CRA is continuously working towards making sure that individuals and businesses claim income earned to which they are entitled, so that important benefit programs can be administered to those who need them. As a result of COVID-19, we are seeing the increased importance of these benefits, and are working to make sure that they continue to be available to Canadians. Any individual or business who underreports income, or claims losses or benefits to which they are not entitled, including ineligible claims for COVID-19 benefits, may have to repay the benefit amounts and may be subject to other possible action.

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

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Associated Links

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Contacts

Media Relations – Regional contact
Cheryl Yeung
Canada Revenue Agency
604-366-6966