Another “natural person” tax “educator” sentenced to four years in prison
A Quebec man was sentenced to four years in prison today by a Court of Quebec judge in Sherbrooke for “educating” individuals to avoid paying taxes using the discredited “natural person theory”, a day after a British Columbia court handed a Victoria man a suspended sentence for a similar conviction.
Nicolet resident and tax protester Christian Lachapelle pleaded guilty last October 22nd to tax fraud charges.
Between June 2007 and November 2010 Lachapelle advised and enabled 93 individuals to avoid, or try to avoid, paying nearly $2 million in income tax for the 2003 to 2010 tax years, a Canada Revenue Agency investigation revealed.
The scheme used by Lachapelle 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.
According to this argument made by tax protesters, which Canadian courts have repeatedly and consistently rejected, there are two distinct persons for tax purposes.
Lachapalle and other natural person theory tax protesters “educate” their students to structure their affairs so that they were a “natural person, working in his own capacity, under a private contract, for his own benefit”, claiming that money earned under this arrangement was exempt from income tax.
This is not the first time that Lachapelle has had issues with the CRA and the law.
He was sentenced to 30 days in jail in 2012 for failing to file his income tax returns despite a court order, as well as fines of $7,000 in 2005 and $14,000 in 2011 for the same reasons.
The Canada Revenue Agency warned the public to beware of people who assert that Canadians do not have to pay tax on the income they earn.
“Canadian courts have repeatedly and consistently rejected arguments made in these tax protester schemes,” CRA warned in a press release. “For those involved in such schemes, the CRA will reassess income tax and interest, and charge penalties.”
“If you have ever made a tax mistake or omission, the CRA is offering you a second chance to make things right through its Voluntary Disclosures Program (VDP),” CRA reminded tax payers. “If you make a valid disclosure before you become aware that the CRA is taking action against you, you may only have to pay the taxes owing plus interest.”
The CRA announced yesterday that Richard Cory Stanchfield, of Victoria, British Columbia, was sentenced on November 23, 2015, in Robson Square Provincial Court, after being found guilty on one count of income tax evasion and one count of counselling others to commit fraud.
The Paradigm Education Group “educator” was ordered to serve a 14-month conditional sentence, including nine months house arrest and 80 hours of community service.
In addition, he was fined $31,012, representing 100% of the federal income tax evaded.
[Photo Credit: Can Pac Swire]