Chartrand v. R. - TCC: Gross negligence penalties on fictitious losses - Take #1

Chartrand v. R. - TCC:  Gross negligence penalties on fictitious losses - Take #1

Chartrand v. The Queen  (December 1, 2015 – 2015 TCC 298, Masse D.J.).

Précis:   This is another case involving fictitious losses and the group known as Fiscal Abitrators.  The sole issue before the Court was the imposition of gross negligence penalties (the federal penalties alone totalled $54,496.62).  The Court reviewed the facts including the educational and occupational background of Mr. Chartrand and concluded that the penalties were justified.  The appeal was dismissed with costs.

Decision:   The decision is best summarized in the penultimate paragraph:

[49]        It is difficult to feel any sympathy for the Appellant; he was blinded by greed. Had he even bothered to consider the information that he, by his signature, certified to be correct and complete, he would have quite easily discovered that his return contained information that was patently false. He would have realized, with just a little bit of thought, that this kind of stratagem was a fraud perpetrated on the CRA and, by extension, on every other Canadian taxpayer. As has often been stated by our courts, our tax system is one of self‑assessment and each individual taxpayer has the obligation to ensure that all the information contained in his returns is truthful, complete and accurate. The Appellant totally ignored the numerous red flags that presented themselves to him. He made no effort to verify the accuracy and completeness of his return. As stated by Justice Tardif in Gingras, above:

31 . . . it is utterly reprehensible to certify by one’s signature that the information provided is correct when one knows or ought to know that it contains false statements. Such conduct is a sufficient basis for a finding of gross negligence justifying the assessment of the applicable penalties.

As a result the appeal was dismissed with costs.