An “educator” connected to a fraudulent tax protest scheme started by Chilliwack’s Russell Porisky is off to jail.
North Vancouver’s Michael Spencer Millar was sentenced on Feb. 28 in BC Supreme Court to two-and-a-half years in jail and was fined $24,000.
Millar was convicted and sentenced in relation to charges of income tax evasion, goods and services tax (GST) evasion, and counselling fraud, according to a Canada Revenue Agency (CRA) press release issued Tuesday.
A CRA investigation determined that Millar failed to report total income of $126,431 for the 2004 to 2008 tax years and, as a result, evaded $12,381 in federal income tax payable. In addition, Millar failed to collect and remit $11,874 in GST for the 2005 to 2008 tax years.
Millar was an “educator” with the Paradigm Education Group (Paradigm), a fraudulent scheme that counselled people across Canada to evade taxes.
The Chilliwack founder of Paradigm, Russell Porisky, was sentenced July 29, 2016 to four years in jail and was handed fines of just under $260,000.
Porisky's partner Elaine Gould was sentenced to one day in jail and fined $38,242.
In 2012, Porisky and Gould were both found guilty of operating a school called Paradigm Education, which counselled hundreds of its students not to pay taxes.
The father of four was convicted of income tax evasion, failing to collect goods and services taxes and counselling to commit fraud. He received a four-and-a-half year jail term. Gould was convicted only of income tax evasion and given a conditional sentence. Gould is a mother of three.
The couple appealed the 2012 conviction and in 2014 it was overturned and a new trial ordered. Following that trial, a BC Supreme Court jury in Vancouver convicted them again.
Porisky was found to have failed to pay $274,000 in income taxes and GST while Gould was $27,000 in arrears.
The court heard the duo's fraudulent counselling to more than 800 students resulted in an estimated $11 million in income tax evasion.
In the recent case, the judge stated that Millar deliberately encouraged his students to file false income tax returns by not declaring their taxable income.
The so-called "natural person" argument behind Porisky's scheme has been rejected over and over by the courts.
In YouTube videos posted in 2008, and that are still online, Porisky says the reality is that “income tax is nothing more than an internal federal excise tax which is only mandatory for those who choose to work as a legal representative, under an implied contract of service, for the benefit of a federally created legal (artificial) person known as a ‘taxpayer.’”
Porisky's problem is that he is wrong, according to the Supreme Court.
In the press release issued March 7, the CRA warns Canadians to beware so-called “tax protesters” who try to deceive people they don’t have to pay taxes on income earned. .
“Canadian courts have repeatedly and consistently rejected arguments made in these tax protester schemes,” the release said. “For those involved in tax protester schemes, the CRA will reassess income tax and interest, and charge penalties. In addition, if convicted of tax evasion, the court may fine them up to 200 per cent of the tax evaded and sentence them for up to a five-year jail term.”
Anyone who has made a tax mistake or a deliberate omission is offered a second change through the Voluntary Disclosures Program. Anyone who makes a valid disclosure before becoming aware of a CRA action against that person, may only have to pay the taxes owing plus interest.