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

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

Canada Revenue Agency B.C. Supreme Court tax evasion

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Protesters in support of farmers against the Indian government's recent agriculture bills took a drive through Penticton before standing in protest outside the Cherry Lane Shopping Centre on Dec. 5. (Brennan Phillips - Western News)
Rally in support of India’s farmers travels through Penticton

Around 30 protesters participated in the rally

Two Canadian petitions are asking to have elected officials removed from office. (Pixabay.com)
COLUMN: Petitions show loss of faith in democratic process

Online petitions from third-party sources have taken aim at elected officials in Canada

Summerland’s cenotaph was originally installed in front of the high school. The old school was located close to the corner of Rosedale Avenue and Jubilee Road. (Photo courtesy of the Summerland Museum)
Cenotaph and parks in Summerland honour fallen soldiers

Community memorials pay tribute to those who were killed in military service

COVID-19. (Image courtesy CDC)
81 new cases of COVID-19 detected in Interior Health Friday

One additional staff member at Kelowna long-term care home tests positive, no new deaths

A snow moon rises over Mt. Cheam in Chilliwack on Feb. 8, 2020. Friday, Dec. 11, 2020 is Mountain Day. (Jenna Hauck/ Chilliwack Progress file)
Unofficial holidays: Here’s what people are celebrating for the week of Dec. 6 to 12

Mountain Day, Dewey Decimal System Day and Lard Day are all coming up this week

A laboratory technician holds a dose of a COVID-19 novel coronavirus vaccine candidate that's ready for trial on monkeys at the National Primate Research Center of Thailand. (Mladen Antonov | AFP)
WEB POLL: Will you take a vaccine for COVID-19?

Doses are expected to arrive in the new year

Travis Hirlaka, Vernon
PHOTOS: Sunrise paints Okanagan skies

Residents in the Okanagan captured stunning shots of a colourful start to Saturday

Robert Riley Saunders. (File)
First Nations Leadership Council demands justice for victims of B.C. social worker

Union of BC Indian Chiefs calls actions of Robert Saunders ‘nothing short of complete depravity’

(City of West Kelowna)
Large housing development in Central Okanagan back on the table

Council considering rezoning to accommodate 184 housing units, project hopes for ~933 by completion

Staff and students at Vernon’s Fulton Secondary School were evacuated due to an electrical short that sent one person to hospital Friday, Dec. 4, 2020. (Kerry Hutter photo)
Vernon high school evacuated, one person injured by electrical short

Incident at Clarence Fulton Secondary forced brief evacuation Friday afternoon

Chinook salmon spawning in the Fraser River near Tete Jeune Cache. ((Shane Kalyn photo, property of the Upper Fraser Fisheries Conservation Alliance)
North-Okanagan Shuswap MP petitions government to reform salmon management

Mel Arnold tables petition to allow more angler access to non-threatened Fraser River chinook salmon

Shuswap Cider Company has applied for a licence that would accommodate a cider manufacturing facility, a tasting room and patio/lounge area at Westgate Market in Salmon Arm. (File photo)
Cider manufacturing facilty, tasting room and patio proposed for Salmon Arm

Council asked to raise a virtual glass to a licence for a cidery and amenities in Westgate Mall

It was an opening day filled with blue skies, sun and COVID-19 protocols at Vernon’s SilverStar Mountain Resort Friday, Dec. 4, 2020. (Brendan Shykora - Morning Star)
VIDEO: Passholders enjoy sunny opening day at Silver Star Mountain

Resort staff say parking reservations, COVID-19 protocols went smoothly Friday, Dec. 4

Most Read