B.C. tax preparer gets house arrest, fine for tax evasion

A Burnaby, B.C., tax preparer has been sentenced to 16 months house arrest and fined $237,717 for falsifying tax returns on behalf of 77 clients over a five-year period.
The Canada Revenue Agency says the fraud resulted in more than $200,000 in federal taxes being evaded. (iStock)

A Burnaby, B.C., tax preparer has been sentenced to 16 months house arrest and fined $237,717 for falsifying tax returns on behalf of 77 clients over a five-year period.

The Canada Revenue Agency says Shiraz Kaba claimed $1.18 million dollars in false expenses and deductions. Kaba pleaded guilty in September to making false statements and tax evasions.

The fraud resulted in the evasion of $203,895 in federal tax payable and an overpayment of $33,821 in Canada Child Tax Benefits.

Spokesman David Morgan says the investigation determined there was no collusion between Kaba and his clients, and the clients were not aware Kaba reported false expenses and deductions until contacted by the CRA.

When individuals are convicted of income tax evasion, they can face fines up to 200 per cent of the taxes evaded and up to two years in jail. But Morgan said individuals can usually avoid prosecution.

"For individuals who haven't filed returns for previous years or haven't reported all their income, they can still voluntarily correct their tax affairs," Morgan said. "Now this is providing CRA hasn't initiated either an audit or an investigation."

Morgan says the fine represents all of the federal tax Kaba attempted to evade on his clients’ tax returns. He was ordered to pay $100,000 of the fine within two weeks, and then $700 per month starting Feb. 2012 until the fine is paid in full.