Bowmanville tax protester sentenced for tax evasion

The Canada Revenue Agency (CRA) announced that, on February 1, 2021, William Wallen, a tax protester from Bowmanville, Ontario, was sentenced to 24 months imprisonment, and a fine of $484,919. On January 10, 2020, Wallen was found guilty in the Ontario Court of Justice in Oshawa to eight counts of unlawfully obtaining or claiming income tax refunds.

A CRA investigation revealed that between October 9, 2012, and April 21, 2015, Wallen filed T2 Corporation Income Tax Returns (T2 Returns) with the CRA for the 2010-2014 taxation years on behalf of 7665083 Canada Inc., a business created solely to advance a sophisticated tax protester filing method. Wallen claimed unlawful income tax refunds amounting to $244,293 on the T2 Returns.

The investigation further revealed that Wallen took deliberate steps towards advancing his tax protester ideology when he assisted in the preparation and filing of a T2 Return of another company that did not carry on any business, 8820309 Canada Inc., for the 2014 taxation year. In this return, an unlawful refund was claimed in the amount of $633,399.

Of the $877,692 in total refunds claimed, Wallen received $107,171. In addition to the court imposed fine, Wallen will also have to pay the full amount of tax owing, plus related interest and any penalties assessed by the CRA.

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

Tax protesters support the false notion that they do not have to pay tax on income they earn. Participating in a tax protester scheme can have serious consequences, including criminal prosecution, jail time and fines. For the five-year period between April 1, 2015, and March 31, 2020, 31 tax protesters were convicted of tax offences related to tax schemes, leading to a total of $2.06 million in court-imposed fines and 55 years of jail time. To learn more, visit Tax Protesters - Questions and Answers.

As a result of a multi-year, multi-pronged effort in deterring the tax evasion schemes of tax protesters, the CRA has seen a sharp decrease in the number of promoters of tax schemes, tax protesters, and taxpayers who participate in the schemes. Since 2006, 98% of tax protesters’ cases referred to the Public Prosecution Service of Canada were successfully prosecuted.

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, eligible losses, and benefits 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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Contacts

Paul N Murphy
Senior Communications Advisor
416-952-8105
PaulNoel.Murphy@cra-arc.gc.ca