Myrtle Robichaud - Single mother gets help from Fiscal Arbitrators

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Myrtle Robichaud - Single mother gets help from Fiscal Arbitrators

Postby Burnaby49 » Wed Feb 03, 2016 5:01 am

Robichaud v. The Queen
2016 TCC 19
http://decision.tcc-cci.gc.ca/tcc-cci/decisions/en/item/127817/index.do

Myrtle Robichaud claimed a $354,351 fake business loss against her taxable income based on Fiscal Arbitrator bullshit. The CRA denied the loss and hit her with a gross negligence penalty of $46,699. This appeal wasn't against her income tax assessments but against the penalty. A bit of background;

The appellant, Myrtle Robichaud (“Robichaud”), testified she lives in Toronto and is employed as an Administrator at Parkdale Community Health Centre (“Parkdale”) which provides a variety of services to individuals and non�profit organizations. She is 57 years old and came to Canada from Trinidad and Tobago in 1988. She took various courses at Toronto School of Business but not any concerning taxation or accounting. In 1990, her ex-husband who was also from Trinidad and Tobago had introduced her to Muntaz Rasool (“Rasool”) who had moved to Toronto from Guyana
.

Rasool is not a new name to me although he's new to Quatloos. He was a promoter of the Fiscal Arbitrator scam and has been charged over it;

http://victomsofdsc.blogspot.ca/

Robichaud tried to paint a picture of herself as someone desperate for help in getting out of the financial difficulties that a single mother living on the edge faces;

Rasool knew Robichaud was divorced, a single mother, had filed for bankruptcy and was currently living paycheque to paycheque and could use the money she would receive from refunds of income tax paid previously. Earlier, she had invested the sum of $17,000 USD in an investment fund promoted by Rasool. With respect to her 2008 tax return, in due course she received a refund cheque in the sum of $25,000 which was deposited electronically into her account.


I suppose this is supposed to tug at our heartstrings, a single mother in financial difficulty just desperately trying to make ends meet when she grabbed at what appeared to be a lifeline. Except for this;

[3] The appellant’s income in 2008 was $114,469.99 consisting of employment income in the sum of $100,944.33 and RRSP income of $13,525.66.


I lose sympathy fast for someone claiming paycheque to paycheque financial destitution when they are making well in excess of what I ever earned and with no indication of extraordinary necessary expenses such as medical or dependants. And what happened to the $25,478 refund that she needed so badly to just tide her over? She immediately spent it.

The solution that Rasool suggested for her financial problems was simple. Concoct a business loss of $354,351 based on fake business expenses then claim a refund of past and present taxes based on it. He didn't call the expenses fakes, he essentially explained it was magic;

[1] The appellant’s appeal now is only from the imposition of gross negligence penalties pursuant to subsection 163(2) of the Income Tax Act (the “Act”) in relation to her 2008 taxation year. In filing her return of income for that year, Myrtle Robichaud claimed a business loss in the amount of $354,351.72 (the “Claimed Business Loss”) which was detailed in a document entitled Statement of Business Activities based on the following:

- Money - $114,643.68 - collected as Agent for Principal and reported by third parties
- Money - $7,451.84 - collected as Agent for Principal and not reported by third parties for a total of $122,095.52.

[2] The above amount was offset by a deduction of $361,803.56 under the heading of Amount to Principal in exchange for Labour resulting in a Gross Profit of $239,708.04, which when the sum of $114,643.68 (money collected as Agent for Principal) was included in the calculations resulted in a net loss in the sum of $354,351.72.


Obviously the loss had to be based on magic because Robichaud never, at any time, owned, operated, or invested in any business.

This was the position of the two sides;

[13] Counsel for the appellant submitted that Rasool had been her tax preparer for many years without any complications having arisen in terms of review by CRA. As a result, she had an honestly-held belief that the advice provided by him was legitimate and had sought – and obtained – confirmation from him. Counsel pointed out that despite recent jurisprudence, there was still the need for the Crown to discharge the onus that would justify the imposition of the gross negligence penalty and that it required more than a naive or foolish belief on the part of a taxpayer who was the victim of a scam perpetrated by someone whom she had known for years and trusted. She was an individual who did not have a working knowledge of taxation or accounting and was not required to deal with numbers or data entry or accounting software in the course of her employment. As such, she relied on the fact Rasool had provided her with reliable advice and trouble-free professional services for many years.

[14] Counsel for the respondent submitted the evidence was clear and conformed with recent jurisprudence in terms of examining conduct on the part of the appellant that was consistent with wilful blindness which can be applied to justify the imposition of gross negligence penalties pursuant to subsection 163(2). Counsel referred to the anomalies that should have put the appellant on her guard. In the 18 years prior to 2008 that Rasool had prepared her tax return, he had not sought any percentage of a refund as his fee for professional services. The amount of the refund was substantial in relation to her income that year and was inconsistent with any refunds received in the past which were attributable to the purchase of an RRSP or other deduction for matters such as professional fees. Counsel submitted the evidence of the appellant was not credible when she denied having looked at the amount of the refund stated in her return and that if – as she testified – she had focussed only on the signature line, then that omission constituted wilful blindness. With respect to the claim for the loss carryback, that is not a complicated concept particularly when the appellant knew she had never operated a business and could not have incurred a loss in relation thereto. The fact that other clients of Rasool had received a refund would not indicate to a prudent person that he or she was automatically entitled to receive the same treatment from CRA.


Leading to the inevitable decision;

[39] The facts in the within appeal are not like those where material has been inserted in a return without the taxpayer’s knowledge or consent. There is no suggestion that the lack of education or intelligence or language skills played any role in the willingness of Robichaud to accept the radical new approach to tax filing promoted by Rasool. This is not the case where there was an omission by a tax preparer that was not noticed by the taxpayer prior to signing the return. It is apparent that Robichaud made a statement that was false, namely that she was engaged in business in 2008 and in those earlier years that were subject of her request for a carryback. Documents in support of those claimed business losses were false as she had not carried on any activity as an agent nor had she engaged one as a principal. Her income was from employment. Did she know that the statement of income was false or was she wilfully blind in the making of, assenting to or acquiescing in the making of those false statements? The evidence leads me to conclude that she knew the statements were false and did not take any steps to refrain from asserting that she had been engaged in business and as a consequence was grossly negligent as defined by subsection 163(2) and the jurisprudence pertaining thereto.

[40] Robichaud needed money and was motivated by promises of a large tax refund that was rarely – if ever – received in the past when filing returns either personally or through her tax preparer, yet she accepted without question the advice provided by Rasool to use a new and unusual method of filing without understanding or attempting to understand the basis thereof and – most importantly – did not care because of an all-absorbing desire to obtain that refund. This intentional and egregious suspension of rational thinking constitutes wilful blindness as to the falsity of the statements in her return.

[41] The respondent has discharged the requisite onus and the penalty imposed by the Minister is justified in respect of the claimed business loss for the 2008 taxation year.

[42] The appeal is dismissed and the respondent is entitled to costs.
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Re: Myrtle Robichaud - Single mother gets help from Fiscal Arbitrators

Postby The Observer » Wed Feb 03, 2016 5:36 pm

I think the court succumbed a bit to its own heart strings:

...Robichaud needed money...


I agree with you that anyone who is making over $100K a year and cannot make ends meet is either lying or in serious need of learning how to budget. So I am not sure sure why the court thinks Robichaud needed money. It is obvious she wanted money since she spent that $25,000 refund quickly. It would be interesting to see what she spent that money on. I doubt that it was for groceries or to finally achieve her goal of buying shoes for her children who had been barefoot since birth.
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