Alberta couple that used ‘natural person’ tax-evasion philosophy sentenced

A file photo of the Canada Revenue Agency headquarters in Ottawa.
A file photo of the Canada Revenue Agency headquarters in Ottawa. THE CANADIAN PRESS/Sean Kilpatrick

An Alberta couple in their sixties have been fined and given conditional sentences for tax evasion. The Canada Revenue Agency (CRA) says the case highlights the perils of listening to the advice of a controversial tax advice company.

According to the CRA, 60-year-old Robert Dale Steinkey and 63-year-old Terry Lynn Steinkey, both of Grande Prairie, were fined and sentenced in the Provincial Court of Alberta earlier this month. Robert was fined $322,278 and given a conditional jail sentence of 22 months while his wife was fined $164,124 and given a conditional jail sentence of 18 months. Both will also have to repay outstanding taxes they owe with interest.

On Dec. 7, 2015, the couple pleaded guilty to evading $486,402 worth of federal income taxes for 2007 and 2008.

The CRA said the court heard evidence the Steinkeys knowingly evaded taxes after they were introduced to the Paradigm Education Group, an organization that claims people can avoid paying taxes by declaring themselves a “natural person.” According to the CRA, the Steinkeys subscribed to this belief and that they were not subject to the Income Tax Act.

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“The CRA warns all Canadians to beware of individuals who try to convince them that they do not have to pay tax on the income they earn,” the government agency said in a statement. “These individuals, also known as tax protesters, not only fail to report their own earnings but also conspire, counsel, and promote these tax schemes.

“Canadian courts have repeatedly and consistently rejected arguments made in these tax protester schemes. For those involved in tax protester schemes, the CRA will reassess income tax and interest and charge penalties.”

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The Paradigm Education Group’s philosophy is credited to Russell Porisky of Chilliwack, B.C. In July, Porisky was sentenced to five-and-a-half years in prison and fined $259,482 in for tax evasion after a protracted court battle.

At his trial, Porisky argued the tax system was designed by international bankers and against the word of God.

READ MORE: Nova Scotia man slapped with over $65,000 fine for tax evasion

While the CRA warns tax evaders could be subject to significant jail time, taxpayers who make a tax mistake or omission and correct the error through its Voluntary Disclosures Program (VDP).

“If a valid disclosure is made before the taxpayer becomes aware that the CRA is taking action against them, they may only have to pay the taxes owing plus interest,” the CRA said.

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For more information from the CRA on tax protester schemes, click here.

-with files from The Canadian Press’ Bruce Cheadle.

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