New Brunswick farmer jailed and fined for HST fraud

On June 18, New Brunswick farmer and second-time offender Merlyn Anderson was sentenced to 15 months in jail and fined $37,212 for tax evasion. This case is a good example of how repeat offenders under the Income Tax Act generally receive harsher sentences than first-time offenders.

From Jan. 1, 2006, to Dec. 31, 2009, Anderson filed false harmonized sales tax (HST) returns for his farming business and claimed fraudulent input tax credits totalling $74,425 to which he was not entitled. In 2007, he had been fined $56,300 for similar offences.

Since this was Anderson's second offence under the Act, and the first was a similar charge, his sentence was aggravated. Says the Canada Revenue Agency (CRA): "Taxpayers who claim false expenses, credits or refunds are liable not only for corrections to their tax returns and payment of the full amount of tax owing, but also to penalties and interest. 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.î

Anderson's inability to learn from his first run-in with the CRA opened him up to a harsher penalty ó 15 months in jail ó the second time around.