Montreal resident Timothée Bessette has been sentenced to 18 months in jail for providing guidance to tax protesters who wanted to avoid paying income taxes after pleading guilty to a charge of tax fraud on Nov. 18 before the Court of Quebec in Longueuil.
A Canada Revenue Agency (CRA) investigation found that for the 2003 to 2010 taxation years, Bessette played a part in helping 11 individuals avoid or try to avoid paying more than $390,000 in income taxes, according to an announcement the CRA released on Thursday. Bessette did this by having the protesters claim inadmissible expenses to reduce or cancel their taxable income.
Bessette was charged specifically for activities that occurred between July 2009 and October 2010 when he acted as a facilitator for Christian Lachapelle, a tax protester scheme promoter. (Lachapelle pleaded guilty to tax fraud charges on Oct. 22, 2015.)
Bessette’s scheme consisted of helping or advising individuals to file income tax returns or request a reassessment using the distinction between a “natural” person and a “legal” person.
There are two distinct persons for tax purposes, according to the argument tax protesters made. The natural person earns the income but the legal entity created by the government through the issuing of a social insurance number is expected to file a tax return. Tax protesters believe that earned income belongs to the natural person and not the legal person.
“Canadian courts have repeatedly and consistently rejected such arguments,” the CRA’s announcement notes.
The CRA warns Canadians to be aware of tax protesters who try to convince them that income taxes don’t have to be paid. The CRA will reassess income taxes and interest and charge penalties for those who are involved in such schemes.
For those who have made a tax mistake or omission, the CRA does offer an opportunity for Canadians who are looking to correct that particular situation through its voluntary disclosure program.
More information about the voluntary disclosure program and tax protester schemes can be found on the CRA’s website.
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