Tax Evasion: A Criminal Case to Consider

Geoff Currier

Tax practitioners may be confronted by taxpayers looking to cheat the system. That’s a problem, and you need to identify the circumstances swiftly. You need to make certain clients you work with don’t break tax laws and that you don’t either. You also want to share information about any potential penalties or conflicts with the Canada Revenue Agency. Under the Criminal Code the penalties for tax evasion can be severe and while jail time for tax cheats is relatively rare, it does happen. We have just such a case to report on, which the CRA published in February.

The Case: A shareholder in a company, a consultant and their accountant all pleaded guilty to charges related to income tax evasion. One has been handed a sentence. According to CRA, Gaetan Desbiens, who is an administrator and shareholder in a company called Cade Groupe Conseil inc in Quebec has been handed a six month conditional sentence and fined $74,450 for evading taxes. 

Claude Genest, who was listed as a consultant for Cade Groupe Conseil inc, also pleaded guilty to willfully evading or attempting to evade paying taxes of Cade Groupe. Like Desbiens he was fined $74,450.

The accountant in the case, Jessy Savaria, also pleaded guilty. He was spared jail time or a fine but was sentenced instead to 240 hours of community service which he must complete within 18 months.

CRA found that from 2012 to 2014 fiscal years, Debiens declared as deductible expenses that were actually the repayment of a personal loan. Debiens, Genest and Savaria produced false documents and submitted them to CRA to justify the expenses they claimed. The scam didn't work and they were caught and convicted.

CRA and Tax Evasion: As we wrote in February in the Knowledge Bureau Report, it cannot be overstated just how seriously CRA takes tax fraud. The agency conducts some 350,000 audits each year which means your clients have about a one in ten chance of having their returns audited. 

CRA initiated reviews are now being enhanced using AI profiling, meaning that it is more critical than ever that your clients understand the importance of accurate reporting. As the tax preparer you must insist on gathering all of the pertinent information from your clients.

Between April of 2020 and March of 2025, 106 taxpayers, or more accurately tax avoiders, were sentenced for evading or attempting to evade taxes. The total amount owing in those cases was $39 million. The fines imposed totalled more than $24.5 million and 49 of those offenders were incarcerated for a total of more than 98 years in jail. 

Since this is considered a criminal offence, it will impact the rest of the person’s life including that individual’s ability to cross the border in future. 

And, lastly, not only must the guilty parties pay the fines imposed, they must also pay whatever amount is owing to CRA plus interest charges.

The Bottom Line: Be sure to ask pointed questions of your clients to be certain that you have gathered all of their pertinent documents. You are within your rights to refuse to prepare a return for any client who refuses to co-operate or disclose all of their pertinent tax information.