A 52-year-old woman who was once involved in large commercial properties in the Yukon has been ordered to repay $235,000 of $368,821 in personal income tax she avoided.

Yen Ngoc Tran – also known as Kathy Tran – was ordered last month by Justice Leigh Gower of the Yukon Supreme Court to make monthly payments of $200 until the debt is paid.

Tran was also ordered to take counselling for a gambling addiction, though there was never any evidence of an addiction provided to the court other than Tran’s testimony of an addiction.

The Canada Revenue Agency (CRA) reported what the judge described in his decision as major discrepancies between the annual income Tran reported in 2007, 2008 and 2009 and her net worth.

In 2007, for instance, Tran reported an annual income of $34,759 – but the CRA found $1.2 million in unreported income, according to the decision.

The decision points out in 2007, Tran owned 75 per cent of the shares in the Bonanza Inn – formerly the Taku Hotel – when it was sold for $776,891.

Tran also purchased an Alexander Street property in Whitehorse the same year for $273,001.

The CRA audit found that while Tran reported an annual income of $34,674 in 2008, the unreported income was $465,730, and in 2009, when she reported an income of $14,939, the unreported income was $413,254, Gower points out in his decision.

The decision also notes Tran owned a residence at 208 Falcon Dr. which had been used as an illegal marijuana grow operation.

She sold the property in 2006 and denied having ever profited from the illegal activity, Gower notes in his decision.

The decision points to various transactions of substantial amounts over the years involving Tran alone or together with one of her three daughters.

In April 2012, for instance, Tran was the sole owner of the Kluane Park Inn in Haines Junction when it sold for a final payout of $521,165, and the inn was mortgage-free at the time.

When Tran and one of her daughters purchased a Vancouver property in June 2012 for $815,000, the payment was made entirely in cash, Gower notes in his decision.

The decision says Tran filed for bankruptcy in 2015, when she reported personal assets worth $800 and a monthly income of $1,500 a month, which quickly dropped to $800.

In November 2016, the Canada Revenue Agency filed its amended proof of claim against Tran for a total of $1,177,806.

The claim was for $368,821 for unpaid income tax for the years 2007, 2008 and 2009, along with a penalty and interest of $808,984, says Gower’s decision.

Gower points out in his decision the guiding principles in cases of failure to pay income tax suggest individuals should not be penalized for bad luck or poor business decisions, that the penalty should not be so harsh that the individual would never recover.

On the other hand, where bankrupts are dishonest or ill-intentioned, the court must turn itself toward the protection of society, he notes.

“At the time the personal income tax debt was incurred, the bankrupt was living an extremely lavish lifestyle, having unaccounted for personal expenditures of over $760,000 in 2007, over $475,000 in 2008, and over $370,000 in 2009.

“The bankrupt has made no efforts whatsoever to pay the personal income tax debt.”

The decision notes the order to repay $235,000 of the uncollected tax amounts to 20 per cent of the total owed Revenue Canada, which is in keeping with similar penalties in B.C. and is in keeping with what Revenue Canada was seeking.