The Canada Customs and Revenue Agency reports that Daniel Kingsley Lear, also known as Ralph Merle Swimm, and the corporation 3056849 Manitoba Ltd. were fined $ 2,410,230 million and Lear was sentenced to 68 months in jail, after being found guilty of income tax evasion in Court of Queen’s Bench.

Lear did not file personal and corporate tax returns for the years 1993 through 1998. He failed to report more than $8 million of income and sought to evade more than $2 million in federal tax. During that time, Lear was the president, secretary, and treasurer of 3056849 Manitoba Ltd. The corporation operated under the names: Wholesale Vacations, Lear Group, Pennywise Privilege, Card International, Incentives International, Get-Aways Travel Network, and Front Desk Pass. These firms acquired excess space from vacation resorts and resold the space to travel agents and car dealerships for promotions.

During the court proceedings, Lear argued that paying tax is unconstitutional and that the Income Tax Act is invalid and therefore unenforceable. However, the jury did not accept his arguments.

The CCRA says it is concerned that individuals who believe misleading information and accept incorrect advice about the Income Tax Act could expose themselves to serious financial and legal problems because of their failure to comply with the law. Taxpayers who believe they can refuse to file income tax returns by declaring that the income tax laws are unconstitutional are relying on bad advice. It encourages anyone who has not filed tax returns or has understated their income to contact a tax services office. By setting the record straight before the CCRA starts any action or investigation, people will avoid civil penalties and criminal prosecution, but they will have to pay any outstanding tax and interest.