A West Vancouver dentist was fined $578,885 and sentenced to 18-month conditional sentence for tax evasion scheme.
In addition to the court imposed fine, Dr. Peter Balogh is required to pay the full amount of tax owing, plus related interest and any penalties assessed by the CRA.
A CRA investigation revealed that beginning in 2005, Dr. Balogh began invoicing his dental practice for services rendered, opting to receive income in the form of contractor payments, as opposed to a salary, as he had in previous years.
Dr. Balogh was believed to be in the Paradigm Education Group which promoted the pseudo‑legal notion that a person can self‑classify as a “natural person”, and thereby be exempt from the payment of income tax.
Dr. Balogh wrote cheques to himself and instructed the company’s accountant to record all payments to him as contractor fees, despite repeated warnings from his accountant that his claim to be a natural person was not supportable.
It was found that Dr. Balogh underreported his income for the 2005 and 2006 tax years, and failed to file his 2007 to 2009 income tax returns. In total, Dr. Balogh failed to report $2,177,000 in taxable income, and evaded $578,885 in income tax for the 2005 to 2009 tax years.
Tax protesters support the false notion that they do not have to pay tax on income they earn.
CRA warns that participating in a tax protester scheme can have serious consequences including criminal prosecution, jail time and fines.
Between April 1, 2016, and March 31, 2021, there were 26 convictions related to tax protesters, leading to a total of $2.75 million in court-imposed fines and 53 years of jail time.
To learn more, visit Tax Protesters – Questions and Answers.