Unawareness not a valid reason in tax preparation rip-off

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Tax Court of Canada denied the appeal of an individual who went to corrupt tax preparers to file the tax return which garnered a large refund.

Patrick Chartrand went to Fiscal Arbitrators to get his income tax return prepared on the recommendation of a coworker. The preparers created false information on the forms in order to produce a substantial refund in excess of $36,000. Although Chartrand had not previously possessed or ran a business the preparers stated that he had suffered substantial business losses. After reviewing the file on Chartrand the Canada Revenue Agency (CRA) declined the application for business losses, and levied a penalty for gross negligence of $54,496.62 as well as provincial penalties and interest.

Chartrand represented himself and took his case to the Tax Court of Canada. He stated to the court that he wasn’t cognizant of the information in the forms submitted. Chartrand said that he just glanced at the papers briefly, and then followed the instructions given by the Fiscal Arbitrators. The court considered Chartrand’s education of grade 11, and his 28 years as a carpenter. Justice Rommel G. Masse then submitted his ruling to deny the appeal on the basis that Chartrand had sufficient understanding of finances to know there was something off about the information.

The decision stated that it is hard to sympathize with Chartrand because “he was blinded by greed.” It went on to say “Had he even bothered to consider the information that he, by his signature, certified to be correct and complete, he would have quite easily discovered that his return contained information that was patently false.” It also said that had Chartrand put some thought behind the strategy he would have seen it as “a fraud perpetrated on the CRA and, by extension, on every other Canadian taxpayer.”

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