Section 143

Subsection 143(4) - Definitions


See Also

Blackmore v. The Queen, 2013 DTC 1213 [at 1147], 2013 TCC 264, aff'd 2014 DTC 5123 [at 7316], 2014 FCA 210

Bountiful not a congregation

The taxpayer was the leader of a community ("Bountiful") that adhered to a variant fundamentalist Mormonism. The community was organized through several corporations. The taxpayer failed to report approximately 90% of the income received from these corporations, whether as an employee or shareholder benefit. He relied on s. 143(2) to have the income attributed to the community's deemed trust rather than himself. The Minister found that s. 143(1) did not apply to create such a deemed trust. The taxpayer was assessed for the unreported income, as well as penalties under s. 163(2).

Campbell J affirmed the Minister's position. The definition of "community" in s. 143(4) is all-inclusive. The taxpayer's community was required to satisfy all four paragraphs of that definition. On the contrary, Cambell J found that none of the requirements were satisfied.

Paragraph (a) - community did not "live and work together"

After reviewing the legislative history of s. 143, Cambell J concluded that the section was modeled on Hutterite colonies, which are essentially self-contained agrarian communities with barracks-like living quarters. This implies that "live and work together" means "the members must live and work in close physical proximity within a defined area that has easily identifiable boundaries" (para. 136). A broader meaning would run the risk of changing the words into "operating in an integrated manner" or "living communally," which are not the words Parliament chose.

The members of Bountiful were more geographically dispersed. The "community" of Bountiful was distributed across several provinces and into the United States.

Paragraph (b) - adheres to the beliefs of a religious organization

Based on the expert evidence, Campbell J concluded that Bountiful did not adhere to the beliefs or practices of any religious organization. Mormonism itself is a religious tradition, not an organization. Bountiful had no connection to the Church of Latter-Day Saints (the LDS church had explicitly rejected some key practices in Bountiful, including polygamy), nor the Fundamentalist Church of Latter-Day Saints (there is no such organization, but rather only people who self-identify as members), nor any other identifiable organization.

Paragraph (c) - no property ownership

The plain language of para. (c) is that the community must prohibit the ownership of property (para. 252). Bountiful did not do so, either in its practices, doctrine, or any existing articles of incorporation (para. 278).

Paragraph (d) - devote working lives to the congregation

Campbell J stated (at para. 307):

While members were, in fact, encouraged to work or obtain secondary education outside the community, there was a general expectation that, if individuals were part of the community, then one's working life would include contributing towards the activities of the community by working in the Company activities. However, the text of component (d) implies that such a requirement must be explicit and ongoing.