In a move that promises to have far-reaching consequences for global operations and international tax compliance, the Supreme Court has ruled that defendants who evaded Canadian taxes could be prosecuted in the U.S. under federal wire fraud laws.
The decision in Pasquantino v. U.S. involved three U.S. citizens who were convicted of wire fraud in connection with an alleged scheme to transport goods from the U.S. into Canada without paying Canadian taxes, including Canadian federal excise tax, general sales tax and provincial sales taxes. They were sentenced to up to 57 months in prison, and their sentences were calculated based, in part, on the alleged loss of tax revenue to Canada.
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