Citation: 2006TCC308
Date: 20060531
Docket: 2001‑2006(IT)G
BETWEEN:
MICHEL BOILY,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
[OFFICIAL ENGLISH TRANSLATION]
REASONS FOR JUDGMENT
Lamarre Proulx J.
[1] These appeals pertain
to the 1990 to 1993 taxation years.
[2] The issue is
whether, within the meaning of subsection 163(2) of the Income Tax Act, the
appellant acquiesced in the making of false statements in his income tax
returns for the taxation years in issue in order to obtain tax refunds to which
he was not entitled.
[3] Three refund
cheques were issued to the appellant. He claims never to have received the
first two cheques, but admits that he received the third one.
[4] I quote paragraphs
9 and 10 of the Notice of Appeal:
[TRANSLATION]
9. Michel Boily
never knew that the cheque dated May 20, 1993 in the amount of $5,329.22, and
the cheque dated November 8, 1993 in the amount of $4,768.21, had
been issued, and he never cashed, or benefited from the amounts of, these
cheques.
10. With respect to
the cheque dated January 30, 1995 in the amount of $3,726.17, Michel Boily
acknowledges that he cashed it honestly believing that he was entitled to it in
light of the representations that Mario Boucher, a Revenue Canada employee
at the time, had made to him.
[5] Roland Pelletier,
who retired on February 2, 2006, was the officer who conducted these
investigations on behalf of the Minister of National Revenue
("the Minister"). He explained that Mario Boucher was a Revenue
Canada employee who had the administrative power to authorize tax refunds.
Mr. Boucher ran a scheme in which he used the system's electronic commands
to authorize fraudulent income tax refunds on which he received kickbacks of
roughly 66% from the taxpayers concerned.
[6] The report on the
first interview with the appellant, held on May 4, 2000, was tendered
as Exhibit A-3. The appellant says that he did not know the exact subject of
the interview when he arrived for the meeting on May 4, 2000.
Mr. Pelletier has no recollection that the specific purpose of the
meeting, as stated in the report, had been explained to the appellant
beforehand.
[7] The object of the
meeting is described as follows:
[TRANSLATION]
|
Object of meeting:
|
The main object of the meeting is to know the
facts surrounding the Jonquière Taxation Centre's issuance of the following
three cheques:
|
|
|
20/05/1993
|
$5,329,22
|
|
|
08/11/1993
|
$4,768,21
|
|
|
30/01/1995
|
$3,726,17
|
[8] The following are a
few statements from the report:
[TRANSLATION]
. . .
We then told Mr. Boily that we work
for the Investigations Division of the Canada Customs and Revenue Agency, and
would like to know the facts surrounding the issuance of three cheques by the
Jonquière Taxation Centre ($5,329.22, $4,768.21 and $3,726.17). Mr. Boily made
the following statements in response to the various questions that we asked
him:
. . .
·
He has a bank account
at the National Bank in Chicoutimi‑Nord.
·
He knows
Mario Boucher of the Jonquière Taxation Centre because he lived with him
for about five months while he was getting divorced.
·
Mario Boucher has
offered to check his income tax returns. In connection with this, he
recalls receiving a $3,700 refund cheque and believes that he gave $1,200 of
this amount, in cash, to Mario Boucher.
·
He has no
recollection of the other two refund cheques, and does not understand what
happened with his file. In fact, he says that he never received that money.
We told Mr. Boily that we would obtain
copies of the three refund cheques and get back to him.
[9] There was another
interview on June 7, 2000 (Exhibit A‑4). The subject of the meeting
was as follows:
|
[TRANSLATION]
Subject of meeting:
|
The main
subject of the meeting is the bank authorizations signed by Mr. Boily
|
[10] Among other things,
the report states:
[TRANSLATION]
. . .
Mr. Boily then stated that he did
not receive the $5,329.22 cheque dated May 20, 1993, or the $4,768.21 cheque dated
November 8, 1993. However, he recognizes his signature on the back of
the $3,726.17 cheque dated January 30, 1995.
. . .
[11] Exhibit A‑2
is a table prepared by Mr. Pelletier using the electronic statements
produced at Tab 8 of Exhibit I-1. It shows the sources of the refunds and the
years in respect of which each refund was issued. Thus, the amount of $3,726.17
received in 1995 is related to a $42,500 business loss claimed for the year
1993.
[12] The cheque, dated
January 30, 1995, can be found at Tab 6 of Exhibit I‑1.
It bears a postal address, which, according to the appellant, is his
mother's address.
[13] The appellant
separated from his first spouse in 1991. After that, he first lived with his
mother. Then, he rented a room in Mario Boucher's home. He knew
Mr. Boucher because one of Mr. Boucher's brothers once dated his first
wife's sister. Although he rented a room in Mr. Boucher's home, he spent little
time there because he had then begun seeing his new spouse. This explains why
he kept his mother's postal address.
[14] With respect to the
receipt of the $3,726.17 cheque, the appellant admitted that he gave Mr.
Boucher $1,200 if not almost one half of the value of the cheque. He said that
he did not feel comfortable about what he did, and that he never asked
Mr. Boucher to do his income tax returns again.
Analysis and conclusion
[15] It would be
difficult for me to find that the appellant received the first two cheques when
his version of the facts in this regard has never changed. He has
consistently maintained that he never received nor cashed the cheques. And there is
no evidence to the contrary.
[16] The first two
cheques pertain to the years 1990 through 1992, and since there is no evidence
that the appellant received them, the appeals concerning those years are
allowed.
[17] With respect to the
year 1993, the very fact that the appellant handed over $1,200, or perhaps an
even greater portion, of a $3,726.17 cheque that was supposed to be an income
tax refund and thus an amount to which the taxpayer was fully entitled, shows
that the appellant acquiesced in the wrongful act. He himself stated that he
realized that this was not acceptable, for after that, he never asked
Mr. Boucher to prepare his income tax returns again.
[18] The appeal for the
year 1993 must be dismissed.
[19] Counsel for the appellant
contended that I should take the settlement proposal—to reimburse the amount of
the cheque—into consideration in awarding costs. Unfortunately, this
amount does not cover even half of the 1993 assessment. Nonetheless, if I
consider the total tax involved for the four years in question, I cannot but
observe that the appellant has been successful with respect to almost half of
that amount. Under the circumstances, I am of the opinion that the appellant
can be awarded half his costs.
Signed at Ottawa, Canada, this
31st day of May 2006.
"Louise Lamarre Proulx"
Translation certified true
on this 29th day of February 2008.
Erich Klein, Revisor
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