Non-payment of tax evasion fine leads to extra jail time for dentist

Ottawa, Ontario, October 19, 2016… The Canada Revenue Agency (CRA) announced today that, on October 17, 2016, Tania Kovaluk was sentenced in the Superior Court of Justice in Ottawa to 1,825 days (5 years) in jail for deliberately choosing not to pay a court-imposed fine for criminal tax evasion. On November 20, 2012, Kovaluk pleaded guilty to multiple counts related to income tax and GST evasion, and counseling others to participate in the Paradigm Education Group (Paradigm) tax protestor scheme which “educated” people on how to structure their affairs in a way to illegally avoid taxes She was sentenced to two years and five months in jail, and was fined $887,328, which was payable in full by June 30, 2014. Since she was released from jail she has made no attempt to pay her court-imposed fine.

Kovaluk, a dentist, knowingly failed to report $2,578,987 in income she earned from 2003 to 2007, thereby evading $721,617 in federal taxes. She promoted the Paradigm scheme through seminars held in Ottawa and Toronto, and counseled others to join the Paradigm program, including nine employees working at Kovaluk's dental practice in Ontario. In addition to spending large amounts of money on personal luxury items such as art, jewelry, vacations, a home in Ottawa, and personal home furnishings, Kovaluk invested her money in offshore assets, including two villas in Costa Rica. Kovaluk transferred her ownership of these villas to third parties for no consideration, with the intention of avoiding payment of her court-imposed fine.

The preceding information was obtained from the court records.

“Tax evasion takes money away from the services that benefit all Canadians,” said Vince Pranjivan, Assistant Commissioner of the Ontario Region. “The CRA takes action against those who try to avoid paying what they owe.”

The Canada Revenue Agency warns all Canadians to beware of “tax protesters” who try to convince you 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. For those involved in tax protester schemes, the CRA will reassess income tax and interest, and charge penalties. In addition, if convicted of tax evasion, the court may fine them up to 200% of the tax evaded and sentence them for up to a five-year jail term. More information on tax protester schemes is available at www.cra.gc.ca/alert.

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). 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. More information on the VDP can be found on the CRA's website at www.cra.gc.ca/voluntarydisclosures.

Further information on convictions can also be found in the Media Room on the CRA website at www.cra.gc.ca/convictions.

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Paul N Murphy
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Date modified:

2016-10-20