Real estate developer nailed for tax evasion

By ThinkPol Staff

A Metro Vancouver real estate developer has been sentenced to 12 months probation and fined $42,950 for tax evasion, the Canada Revenue Agency says.

Harpreet Kaur Sidhu of Burnaby, British Columbia, the sole director and shareholder of 6368 Lucky Construction Ltd, pleaded guilty to one count of tax evasion under the Excise Tax Act.

The fine she received represents 100% of the goods and services tax/harmonized sales tax (GST/HST) that she attempted to evade, according to the CRA[1]https://www.canada.ca/en/revenue-agency/news/newsroom/criminal-investigations-actions-charges-convictions/burnaby-resident-sentenced-tax-evasion-20171208.html?utm_source=mediaroom&utm_medium=eml.

Lucky is a real estate development company in the business of purchasing residential properties, demolishing the existing buildings, sub-dividing the lots, constructing new homes, and then selling the newly constructed properties, court documents filed by the agency show.

Lucky’s luck ran out when a CRA investigation determined that Ms. Sidhu forged a Residential Tenancy Agreement (RTA) for a North Vancouver rental property owned and constructed by Lucky.

CRA got lucky when a search warrant executed at Ms. Sidhu’s residence uncovered the original RTA for the rental property.

According to the CRA, by falsely stating the tenancy date on the RTA as prior to the July 1, 2010 HST implementation, Ms. Sidhu attempted to evade the payment of tax. The difference between the 5% GST and the 12% HST payable on the fair market value of the rental property (less a “transitional rebate”) is $42,950.

Wilfully failing to follow tax laws could result in serious consequences, including reassessments, the imposition of civil penalties and criminal tax investigations and prosecutions resulting in the imposition of court fines, jail time and a criminal record, CRA warns.

Under the income tax and excise tax laws, persons convicted of tax evasion will face fines ranging from 50% to 200% of the evaded taxes and up to five years imprisonment. If convicted of fraud under Section 380 of the Criminal Code, an individual can face up to 14 years in jail.

“If you have made an omission in your dealings with the CRA, made a tax mistake or left out details about income on your tax return, the Agency may give you a second chance to correct your tax affairs and avoid criminal prosecution,” the revenue agency said in the news release. “The Voluntary Disclosures Program (VDP)[2]https://www.canada.ca/en/revenue-agency/programs/about-canada-revenue-agency-cra/voluntary-disclosures-program-overview.html may give you the opportunity to come forward, make things right, and have peace of mind.”

“Disclosures that are made before the CRA launches an enforcement action such as an audit or criminal investigation may only result in you having to pay taxes owed plus interest,” CRA added. “That being said, the VDP is currently under review.”

References   [ + ]

1. https://www.canada.ca/en/revenue-agency/news/newsroom/criminal-investigations-actions-charges-convictions/burnaby-resident-sentenced-tax-evasion-20171208.html?utm_source=mediaroom&utm_medium=eml
2. https://www.canada.ca/en/revenue-agency/programs/about-canada-revenue-agency-cra/voluntary-disclosures-program-overview.html

2 Responses to Real estate developer nailed for tax evasion

  1. nonconfidencevote says:

    So.
    Now that this “Realtor” has run out of “Lucky” can we expect the BC Real Estate Association to give her more than a slap on the wrist?

    I , for one, wont hold my breath.

    “Circle the wagons Realtors! Bad press is ‘acommin!”

    • nonconfidencevote says:

      Oops, Sorry,
      My apologies to all the honest realtors out there (where ever you are).
      I saw “Real Estate” and immediately saw red.(like the coming real estate sales season?).

      Anywho.
      One can only hope this is the start of a Massive CRA investigation into the thousands of Real Estate flips and non resident sales that have been done without paying the appropriate taxes………

      Go get em Canada Revenue!
      Joe Taxpayer will cheer every conviction, fine and jail term handed out to the real estate sales and developement community found cheating.

      🙂

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