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

WATCH: Brother of missing Hope woman makes emotional appeal for more media attention

Next search for Shawnee Inyallie Nov. 18 along Highway 1 towards Boston Bar

Gas price drop expected to hit Fraser Valley today

Analyst says to take advantage, warns slight increase may follow

HATS invites Hope residents to talk about addiction in the midst of opioid overdose crisis

First talk happening Thursday, Nov. 15 at Blue Moose Coffee House

Chilliwack teen to take on the world after winning Canadian junior dog-handling national championship

Chilliwack’s Kayla Penney is heading to Crufts to compete for her first international title

Country talent Petunia returns to Bozzini’s in Chilliwack Saturday

Petunia, performing Nov. 17, is referred to as ‘The Savior of Country Music’

VIDEO: People with diabetes meet their alert dogs

A diabetic alert dog is trained to detect low blood sugar in people who have Type 1 diabetes

Hunter who saved B.C. man pinned inside smashed truck says ‘God was sending me to him’

Sayward man describes chance discovery of Duncan Moffat, 23, in northern Vancouver Island woods

Road-weary Canucks thumped 6-2 by Wild

Vancouver hosts the Montreal Canadiens on Saturday

Toronto private school didn’t report alleged sexual assault to police

Police say a sexual assault at an all-boys Catholic institution was not reported to them

China says butt out; Canada calls for release of “arbitrarily” detained Muslims

A Chinese foreign ministry spokeswoman accused Canada’s envoy of going beyond their diplomatic roles

Dead Saskatoon tattoo artist’s skin removed and preserved

The skin was removed in honour of the well known artist’s work

Metro Vancouver mayors cancel Surrey LRT in favour of SkyTrain

TransLink will immediately suspend work on light rail

Lower Mainland couple missing in Thompson-Okanagan area

Barriere RCMP received a missing persons report for two senior overdue travellers

Vancouver Warriors cancel first 2 weeks of season as labour dispute continues

The announcement means games scheduled for Dec. 1 and Dec. 8 will no longer be played

Most Read