Ex-CRA staffer and wife found not guilty of tax evasion

Judge left with a reasonable doubt on the matter of necessary intent

A judge has found a former Canada Revenue Agency auditing department employee and his wife not guilty of tax evasion, noting a big difference between being wrong and knowingly being wrong.

The Crown alleged Raymond Patry and his wife Tara Patry, who were charged in a six-count indictment under the Income Tax Act and the Excise Tax Act, evaded taxes by operating a tax-preparation business — Accounting Professionals — that caused numerous clients to claim false business losses.

Justice Murray Blok, who heard from more than 30 witnesses during a 12-day trial in B.C. Supreme Court in New Westminster, found Tara Patry not guilty on all counts, concluding that the Crown had “not met its burden of showing beyond a reasonable doubt that Ms. Patry was involved, either as a principal or as a party.”

The judge also stated in his reasons for decision that “despite my conclusion that Mr. Patry’s tax strategy was flawed, I conclude that it is at least possible that Mr. Patry believed he had formulated a viable tax strategy.

“He cannot be convicted for being wrong, only for knowingly being wrong. The Crown has therefore failed in its proof on this essential point,” Bloc decided.

“On my assessment of the whole of the evidence, I am left with a reasonable doubt on the matter of the necessary intent for these tax evasion offences.”

READ ALSO: Equitas lawsuit appeal denied by Supreme Court

READ ALSO: Tenant claims landlord discriminated against her for smudging

READ ALSO: Court battle over fence in Surrey costs defendant nearly $27K

The court heard Raymond Patry, 52, who had worked full-time in the CRA’s audit department from November 1991 to April 2005, started his own business, Accounting Professionals, in 2005.

He had been charged with wilfully evading or attempting to evade income taxes of $36,873.31 by failing to report taxable income of $193,813.32 between Dec. 31, 2005 and Aug. 21, 2008 while she was charged with wilfully evading or attempting to evade income taxes of $32,845 by failing to report taxable income of $193,813.32, for that same period.

Tara Patry was also charged with obtaining or claiming $32,751 in refunds or credits under the ITA “to which she was not entitled, by making, participating in, or assenting to or acquiescing in the making of false or deceptive statements insofar as she failed to report taxable income of $193,813.32.

As well, the couple had been charged with wilfully evading or attempting to evade remittance of GST of $25,585.19 between Dec. 31, 2005 and April 1, 2008; wilfully evading or attempting to evade payment of income taxes of $427,760.47 by claiming false business losses of $2,113,080.08 on the income tax returns of 32 other taxpayers; and obtaining or claiming $59,554.85 in refunds or credits under the ITA “to which their clients were not entitled, by making, participating in, or assenting to or acquiescing in the making of false business losses on the income tax returns of 18 other taxpayers.”

Many of the witnesses who were clients — 31 of this type — were friends, neighbours, acquaintances, or referrals from these who engaged Accounting Professionals to do their taxes for one or more of the 2004 to 2007 taxation years.

“Typically, the clients met with the Patrys at the kitchen table of the Patry’s home,” Blok noted. “Both of the Patrys were present, but it was Mr. Patry who led the tax-related conversation.”

The judge noted Patry’s tax-compliance strategy “was based on the notion that a taxpayer can change the use of a principal residence, even retroactively, through a change in the taxpayer’s intention, such that it could be treated as business inventory instead of personal property.

“This re-characterization or re-designation of the property use was the basis on which Mr. Patry claimed significant additional expenses or losses on behalf of his clients.”

Patry told the court that his wife never had any income, that the CRA reassessed her on his business income, but she had never been involved in his business and it was not a partnership.

“Mr. Patry said he still believes that the losses he claimed on his clients’ income tax returns were legitimate deductions,” Blok noted.



tom.zytaruk@surreynowleader.com

Like us on Facebook Follow us on Instagram and follow Tom on Twitter

Just Posted

City budget 2019: Kelowna council settles on 4.43% tax hike

Proposed tax hike includes controversial 1.95 per cent levy to address infrastructure “deficit”

Scholarship smooths road ahead for Okanagan College transfer student

27 students from Okanagan College received awards from the Irving K. Barber Society

Crash stalls traffic on Benvoulin, vehicle flipped on its side

Early reports from the scene note traffic is backed up in both directions along Benvoulin near Byrns Road.

Your guide to winter light ups around the Okanagan

From Vernon to Summerland, with a stop in Kelowna, we’ve found some activities for you to enjoy

Omar Khadr wants changes to bail conditions

‘My life is held in suspension’, says the former Guantanamo Bay detainee

Sissons scores OT winner as Predators beat Canucks 4-3

VIDEO: Vancouver battles back to earn single point in Nashville

Lions announce seven members of coaching staff not coming back for 2019

The operational moves come two days after the Lions announced DeVone Claybrooks as the team’s new head coach

Okanagan lawyer honoured by appointment to Queen’s Counsel

Only seven per cent of practising B.C. lawyers are appointed

Missing man last seen in Shuswap

Red Deer RCMP would like public’s help locating elderly man with dementia last observed in Sicamous

$12K awarded to atheist family who oppose Christmas, Hanukkah in B.C. classroom

Gary Mangel,May Yasue said holidays, Remembrance Day and Valentine’s Day not appropriate in preschool

Aboriginal poet faces backlash for calling out NHL-themed totem poles

Rebecca Thomas says she received backlash for asking a drugstore chain to remove NHL merchandise

No plans yet for free WiFi on BC Transit buses

BC Transit says they are monitoring the roll-out of free WiFi on Translink vehicles

Some Kotex tampons recalled in Canada and U.S.

In some cases, tampon users sought medical attention “to remove tampon pieces left in the body.”

Most Read