The Canada Revenue Agency (CRA) announced that Mariani Metal Fabricators Limited (MMFL) of Toronto, Ontario, and its shareholder, Vincenzo Mariani (Mariani) of Kleinburg, Ontario, were found guilty on December 5, 2019 in the Ontario Court of Justice in Toronto of two counts of tax evasion and for making false or deceptive statements under the Income Tax Act related to their corporate tax returns. Mariani was also found guilty of two counts of income tax evasion and for making false or deceptive statements on his individual tax returns. On February 20, 2020, Mariani was fined a total of $15,127. MMFL was fined a total of $7,722. In addition to the court imposed fine, Mariani and MMFL will also have to pay the full amount of tax owing, plus related interest and any penalties assessed by the CRA.

A CRA investigation found that MMFL paid for the costs pertaining to Mariani’s son’s wedding as business expenses and claimed the expenses on its 2011 and 2012 corporate tax returns. The investigation also found that Mariani did not report the ensuing shareholder benefit of $86,938 on his individual tax returns for 2010 and 2011. Mariani and MMFL thereby evaded a total of $35,508 in income tax.

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

Tax evasion is a crime. Falsification of records and claims, willfully not reporting income, or inflating expenses can lead to criminal charges, prosecution, jail time, and a criminal record. In 2018-2019, there were 22 convictions, with 12 taxpayers sent to jail for a total of 19 years. These individuals were sentenced for willfully evading payment of $4,179,089 in taxes.

Willfully 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 and jail time. 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.

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

Contacts

Paul N Murphy
Senior Communications Advisor
416-952-8105

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