Ministry of Revenue

President Of Fitness Depot Franchises Fined For Tax Evasion

Court Orders More Than $68,000 In Penalties

    OTTAWA, July 13 — A Ministry of Revenue investigation of two
Fitness Depot franchises uncovered $119,178 in unpaid Provincial Sales Tax
(PST).
    On June 25, David Ross pled guilty on behalf of 1120860 Ontario Inc.,
operating as Fitness Depot, to failing to remit PST collected from its
customers and that he directed or participated in the company's offence.
    Ross also pled guilty on behalf of 2033324 Ont. Inc., operating as
Fitness Depot Kanata, to wilful evasion of PST and that he directed or
participated in the company's offence.
    Ross registered one franchise with the ministry but failed to pay
$18,671.37 in PST collected over three years. In September 2003, Ross opened a
second franchise, Fitness Depot Kanata, but did not obtain a permit from the
ministry. Despite not registering the new corporation or submitting the taxes,
more than $100,000 in PST was collected from customers.
    Ross was fined $4,668 for the offences of the registered franchise and
$50,254 for the other. He must also pay a surcharge of $13,730.50 to the
Ontario Victims' Justice Fund, bringing the total court-imposed penalties to
$68,652.50. The companies received suspended sentences.
    In addition to court-imposed fines and surcharges, businesses convicted
of tax offences must repay any taxes owing, plus civil negligence penalties
and interest.
    The Ministry of Revenue operates a Voluntary Disclosure Program.
Corporations and individuals may come forward and voluntarily report past
violations of provincial tax laws and pay any amounts owing. Prosecution and
civil negligence penalties are waived in such cases. To qualify for immunity
from prosecution and penalties, a disclosure must be truly voluntary - it
cannot be prompted by a request for access to a taxpayer's business records or
other ministry enforcement action.

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                 For more information visit www.rev.gov.on.ca
    

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