Newfoundland and Labrador businessman’s tax scheme nets house arrest; heavy fine

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The following information is now available on the CRA Web site:

News Release

St. John’s, Newfoundland and Labrador, March 4, 2008 … Richard Murphy, a businessman and engineer from Paradise, Newfoundland and Labrador, has been fined more than $488,000 and sentenced to four months of house arrest, after being convicted today on charges of tax evasion in St. John’s Provincial Court.

Mr. Murphy pleaded guilty to two counts of evading the payment of federal personal income tax under the Income Tax Act and one count of evasion of goods and services tax/harmonized sales tax (GST/HST) under the Excise Tax Act. In addition to the above-noted fine and sentence, Mr. Murphy still has to pay the full amount of tax owing, plus interest, and any other penalties the Canada Revenue Agency (CRA) assesses.

A CRA investigation revealed that Mr. Murphy, in his role as director of the engineering consulting firm I&C Solutions Incorporated, deliberately hid income by incorporating his company and depositing income in offshore bank accounts in a “tax haven” jurisdiction. During the period from 2000 to 2005, Mr. Murphy earned $1,555,232 from the sale of consulting services delivered in Canada, yet he did not file any income tax returns. He also failed to register his company to collect the GST/HST and to file any GST/HST returns. His actions resulted in the understating of federal income tax payable by $404,697 and the GST/HST payable by $83,443.

“Tax evasion takes money away from the services that benefit all Canadians,” said William V. Baker, Commissioner of the Canada Revenue Agency (CRA). “The CRA takes action against those who try to avoid paying what they owe.”

The information in this news release was obtained from the court records.

Further information on convictions can also be found in the Media Room on the CRA website at

SOURCE: CRA Newsroom


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