Citation: 2005TCC431
Date: 20051024
Docket: 2001-1265(IT)G
BETWEEN:
BERTRAND JOBIN,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
REASONS FOR JUDGMENT
Bédard J.
[1] These appeals filed under the general
procedure were heard in Chicoutimi, Quebec, on March 16, 2005. On the day
prior to the hearing of these appeals, I presided over two series of appeals
filed by two other taxpayers added as defendants in proceedings related to the
same scheme as the one at hand involving fraudulent tax refunds issued to
certain taxpayers by two employees of the Jonquière Tax Centre, one of whom is
Mario Boucher. On June 14, 2005, I issued a judgment in each of these two
taxpayers’ cases. In the first case, I allowed the appeal (Madeleine Gagnon
ès-qualité d'héritière de feu Richard Boucher c. La Reine, 2005CCI311),
and, in the other one, I dismissed the appeal (Turner c. La Reine,
2005CCI313). Based on the evidence before me, I find that the circumstances
surrounding the appellant’s case are even worse than in the Turner case
referred to above. I should therefore dismiss his appeals as well.
[2] The facts upon which the
Minister of National Revenue (the "Minister") relies to establish the
assessments for the relevant years are stated at paragraph 23 of the Reply to
the Notice of appeal:
[TRANSLATION]
a. this
case results from an internal investigation regarding certain employees of the
Jonquière Tax Centre who set up a scheme aimed at issuing fraudulent tax
refunds to a number of individuals in consideration for the payment of a
commission based on a percentage of the said refunds;
b. the appellant
is the brother-in-law of Mario Boucher, an employee for about 15 years at the
Jonquière Tax Centre of Canada Customs and Revenue Agency who was assigned the
examination of refunds;
c. Mario Boucher
had access to the Canada Customs and Revenue Agency’s computer system
containing all the tax data concerning Canadian taxpayers;
d. with the
assistance of Mario Boucher, the Appellant pocketed tax refunds to which he was
not normally entitled;
e. on May 8, 1995,
the Appellant received a tax refund in the amount of $6,490.25;
f. this refund
results from an amendment made on May 5, 1995, to the Appellant’s tax returns
for the years 1992 and 1993 allowing business investment losses and further
losses other than capital losses regarding other years;
g. on July 4,
1995, the Appellant received a tax refund in the amount of $180.06;
h. this refund
results from an amendment made the same day to the Appellant’s 1994 tax return
adding a loss other than a capital loss from other years;
i. on January 29,
1996, the Appellant received a tax refund in the amount of $2,121.75;
j. this refund
results from an amendment made the same day to the Appellant’s 1994 tax return
adding a $14,450.00 deduction for support payments;
k. the Appellant
did not file any document supporting his entitlement to such losses or
deductions;
l. in support of
the revised assessments dated September 25, 2000, the Respondent argues that
the Appellant has filed erroneous facts with respect to the taxation years
1991, 1992, 1993 and 1994, through negligence, lack of attention or voluntary
omission, or by acting fraudulently or submitting information under the Income
Tax Act;
m. the claim for
losses and deductions pertaining to the taxation years 1992, 1993 and 1994
gives the Minister reason to believe that the Appellant, knowingly, or under
circumstances amounting to gross negligence, has made or has participated in,
assented to or acquiesced in the making of, a false statement or omission in
the tax returns filed for the taxation years 1992, 1993 and 1994, in such a way
that the income tax owing as a result of the information submitted in the tax
returns filed for those years was less than the amount actually payable for
those years.
[3] The issues are
summarized as follows by the Respondent at page 5 of the Reply to the Notice of appeal:
[TRANSLATION]
a. determine whether or not the appellant, in computing the
federal income tax payable for the taxation years 1992, 1993 and 1994, is
entitled to claim losses other than capital losses pertaining to other years
and a deduction for paid support payments.
b. determine, absent such entitlement, whether or not the
assessment of a penalty under subsection 163(2) of the Income Tax Act against
the Appellant for the taxation years 1992, 1993 and 1994, with respect to these
losses and deductions was justified.
[4] To these issues I
would add the one dealing with the applicability of subsection 152(4) of the Income Tax Act (the "Act") referred to by the Appellant in the Notice of
appeal.
[5] From the outset,
the Appellant has admitted that he was not entitled to the deduction for
support payments. As for the
Appellant’s alleged losses other than capital losses, they lack credibility;
they are uncorroborated and appeared at times unlikely and confused.
Accordingly, the Appellant is not entitled to claim these losses. Based on the
evidence, I also find that the Appellant knowingly made false statements in his
tax returns and that he participated in, assented to or acquiesced in the
making of these false statements. As such, the penalty assessed under
subsection 163(2) of the Act is appropriate and further justifies the
application of subsection 152(4) in favour of the Respondent.
[6] Briefly stated,
below are the factors weighing against the credibility of the Appellant in
general:
a. his memory is very
selective and particularly very vague; in spite of his inability to recall
material facts, he was quite adamant about his ability to recall a couple of
points weighing in his favour;
b. because he chose
not to call as witnesses several individuals who could have corroborated his
own version on a number of points, the Court is inclined to believe that the
evidence obtainable from these individuals would have been detrimental to the
Appellant’s case. Some of these individuals include Georges Marcotte,
Fabien Tremblay,
Martin Bouchard,
as well as an agent of the Caisse populaire de Roberval;
c. by his own
admission, he still trusted Mr. Boucher, the same person who implicated him in
the scheme, enough to seek his assistance in the preparation of this appeal.
[7] I also reject the
evidence given by Mr. Boucher
for the following reasons:
a. he handled the
Appellant’s file despite the fact that the Appellant was getting romantically
involved with his sister at the time; it would seem that the Appellant
attempted to conceal this fact by referring to Mr. Boucher in his Notice
of appeal as an "agent of Revenue
Canada";
b. in spite of his
experience with Revenue Canada (his employment with the Department – as
it then was – started in 1983), he nevertheless allowed the conveyance of real
estate to justify a deduction for support payment in 1996;
c. he admitted acting
fraudulently in other cases brought before this Court.
[8] As to the
credibility of the Appellant and Mr. Boucher in connection with the issue of the losses:
a. the explanation
offered by the Appellant about the cause of the losses was very confusing and
still remains somewhat so in my mind, in spite of the Appellant’s claim that
the losses resulted from a loan to, and the pledging of assets as collateral
for the benefit of, Transport Rob-Lac Inc., his now bankrupt company;
b. his answer to the
question as to why his name does not appear on the list of creditors of
Transport Rob-Lac Inc. failed to satisfy me;
c. the Appellant
failed to convince me that a claim concerning these losses had been sent to
Revenue Canada before he ever met Mr. Boucher. According
to his version of the facts and that of Mr. Boucher, it appears that the
appellant waited eight months before simply asking the "Revenue Canada agent" (Mr. Boucher) why it took so long to process his
claim.
In fact, even though a claim was indeed made to Revenue Canada before these two individuals met (a fact undisputed
by the Respondent), I am convinced that the claim had no connection with a tax
refund owed the Appellant. I am more inclined to believe that this data input
in the system simplified the operation of the scheme in this case.
[9] With regard to the
support payments, I would add
that the Appellant failed to provide me with a satisfactory explanation as to
why he omitted to claim a deduction for the same support payments at the
provincial level, which is what taxpayers would normally do.
[10] For these reasons,
the appeals are dismissed.
Signed at Ottawa, Canada, this 24th day of October 2005.
"Paul Bédard"
Email this Content