You have to dig real deep to find the root of why someone would attempt to defraud his neighbour (fellow city tax payers) of five grand by padding expense reports for reimbursement. This is the Joe Magliocca story – a municipal councillor in Calgary. He was convicted today.
As a tax accountant, it’s very rare that I encounter any individual who proactively engages in deceit in order to gain an advantage via the tax system. Whenever in doubt, folks will present a transaction in order to determine its treatment. Whenever I witness something questionable, in the vast majority of the time it has to do with an individual’s inattentiveness or carelessness. Some folks do not exhibit the requisite patience to record keep meticulous and accountants / bookkeepers become adept at sensing these personalities. If you are one of these personalities who believe that your time is too valuable to spend with the minutiae particular to your own personal finance and decide to delegate the tasks then ensure to deploy a control mechanism in order to ensure a quality output. Examples of such controls would be spot check and reports.
It’s hard to conceive what a person would be thinking when purposefully conducting an act of fraud. Any perceived benefit far outweighs the penalties and loss of reputation. Here is one hard reality that every taxpayer should come to learn. If you habitually file late or if you draw money from a corporation and fail to file or if you represent a claim in which you are not eligible….you may be perceived no differently than Mr. Magliocca in the eyes of the law. Income tax regulations deal with terms such as tax avoidance and tax evasion and penalties are applied in accordance with how you appear absent of a judge or jury.
Convictions failed to surface during the “Panama Papers” investigation but these off shore corporate directors likely have much deeper pockets for paying lawyers than you. I know of one class action tax case still unresolved some fifteen plus years on whereby you would have thought that a Statue of Limitations would apply.
Mr. Joe Magliocca looks to appeal his conviction.
Never be anyone who wrongly accuses, gaslights someone in despair, purposely or accidentally commits a fraud. However; do hold people to account and look to build trusted warm relationships because we all need more of those.