Leon Edery, a resident of North York, Ontario, was fined a total of $32,229 for a conviction on one count of issuing false information about charitable donation receipts. He received a one year conditional sentence, says the Canada Customs and Revenue Agency.

The fine represents 50% of the federal income tax that the individuals he provided receipts to attempted to evade. The maximum penalty for evading taxes under section 239 of the Income Tax Act is 200% of the taxes evaded and/or a two-year jail term.

The CCRA discovered for the years 1993 to 1997 that Edery, a clergyman and the sole administrator for three Canadian charities, devised a plan to issue donation receipts exceeding the amounts that the donors contributed. Edery would sell the receipts for 10% to 20% of their value directly to taxpayers himself or through intermediaries such as taxpreparers, who would promote the receipts to their clients.

The majority of the donation receipts were backdated to the prior calendar year so that individuals could file the receipts immediately. All 45 tax returns that claimed charitable donation receipts with false information have been reassessed for the income taxes that should have been paid, plus interest.

Individuals and corporations that have not reported all of their income or who have not filed returns for previous years can still voluntarily correct their tax affairs, says the CCRA, if they make a full disclosure before any action or investigation is taken against them. They will not be penalized or prosecuted and will only have to pay the taxes owing plus interest.