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

Student rangers sought for Terrace

Young adults interested in student ranger program have until Feb. 24 to apply

Skeena Sawmills audit good overall, but fault found in tree planting

Violation only issue discovered in Forest Practices Board report

DoK delays third reading of TSW land rezoning

Decision on hold until another public hearing is held

Is Terrace prepared for a rail disaster?

Council asked to review surge in dangerous goods movement: “I live in the blast zone,” says resident

Woman killed in head-on crash near Vanderhoof

RCMP say driver crossed the centre line and hit a loaded fuel tanker truck

B.C. opioid crisis to get same world-renowned treatment approach as HIV/AIDS

A program that focuses on treatment as prevention will roll out Jan. 17

Olympian snowboarder Max Parrot diagnosed with Hodgkin’s lymphoma

Each year in Canada, approximately 900 people are diagnosed with Hodgkin’s lymphoma

‘Prince of Pot’ Marc Emery accused of sexual assault, harassment

Emery denied the allegations, but a Toronto woman says she is not the only one speaking out

Vancouver Island photographer makes National Geographic’s 2018 elite

Rare double honour for Marston from the 36 best Your Shots out of nearly 19,000 photos

Ex-Liberal candidate in Burnaby, B.C., says volunteer wrote controversial post

Karen Wang dropped out following online post singling out NDP Leader Jagmeet Singh’s ethnicity

Asteroids are smacking Earth twice as often as before

The team counted 29 craters that were no older than 290 million years

Canada’s arrest of Huawei exec an act of ‘backstabbing,’ Chinese ambassador says

China has called Canada’s arrest of Huawei chief financial officer Meng Wanzhou ‘politically motivated’

Port authority imposes ban on development around Lelu Island

Following Pacific Northwest LNG, there will be no future projects proposed near Flora Bank

In limbo: Leftover embryos challenge clinics, couples

Some are outright abandoned by people who quit paying storage fees and other couples struggle with tough decisions

Most Read