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« The Smith Manoeuvre and the Singleton Shuffle bite the Dust. | Tax Tips For Spouses in Canada »

Tax agents rebuked, $1.3 million awarded to man who was target of raid

 At a time when I have been busy losing faith that Canada is a kinder gentler country, there is a glimmer of hope that somehow our government agencies, that have become ever increasingly more punitive, will be reigned in.

Government agencies have been ignoring the Charter of Rights and invading privacy, behaving in high handed and arbitrary fashions.

The agencies are not consistent on how they treat one person over another. There is a lack of fairness.

The agencies do not care who’s life they ruin or what business goes down because of them. Bankruptcies are up 50% and you can be sure there is a government agency has played some role in making the situation worse.

There is a growing groundswell of citizens who have had enough. This recent court case in favor of the citizen will set the future in motion. You can look to see more cases and more losses by government agencies.

CRA and their tax regime pales in comparison to the Ontario Securities Commission who will post the details of allegations against a citizen. They know no boundaries of decency, not even stopping at the publishing of a citizen’s mental health on their web site. Further they will torment said ill person with consistent badgering …overruling Doctor’s letters, making demands and then publishing the information for the entire country to read. The OSC conducts a trial by media and tribunal of personal information with no concern of a citizens right to be presumed innocent until proven guilty. They ruin businesses and lives in the pursuit of evidence. And if you want to understand the reason just add up all the fines posted on the OSC site.

The Minister Of Labor is a feared agency for businesses… they can come in and make orders and levy huge fines and have the power of incarseration. Usually it is just huge fines. Again there is trial by being guilty until proven innocent.

The OSC and MOL both can conduct trials (Called a Tribunal)  to discover evidence. They follow rules of court, but when you are sitting there being cross examined by their lawyers, you get the picture… you are in a judicial system with no protection by the Charter of Rights.

While CRA can not audit while they are investigating, and when it becomes an investigation, they lose a lot of their broad powers. Still their mandate is about getting as much money as they can. In the GTA alone there are 2,400 auditors out looking for the almighty dollar.

WSIB comes in looking for increased premiums, missed anythings… Team leaders pump up their auditors to get as much as you can… make targets etc…. If you agree to their dollar assessments, then they will back date your debts. Fighting them is expensive, so most businesses fold. In order to fight them, you need to pay the premiums first and then they will listen to your objections.

Now CRA and WSIB have teamed up and share good leads. It makes them both more profitable, one Agency goes in and finds lots of money and then they tip off the other Agency. So now it is a double whammy.

And that is what the Government Agencies have become….Teams of Auditors and investigators, out to get as much money as they can. Success is measured in dollars and cents. They levy huge penalties on people in hard times who can not pay their ticket….. When a citizen can’t pay the principal debt, let alone the tripling of the final amount, very often the result is a bankrupt citizen.

Canada has become a place where its citizens fear their government even when they have done nothing wrong. You never know who’s life will be ruined by the government.

It is all about money and now that we are in tough economic times, the agencies are even more agressive in their financial assults on the Canadian Citizen.

A kinder gentler Canada? I think not!

The following case gives a glimmer of hope that Agencies will have to reign in their Dark Forces and respect the law, the Charter and the Constitution.  And God forbid… have a sense of fairness.

Dan White.

The following article is printed on line on the Times Colonist and written by L Dicson.

*****

http://www.timescolonist.com/news/agents+rebuked+million+awarded+target+raid/1279538/story.html

Hal Neumann, with wife Maureen Rivers, has been awarded $1.3 million in a lawsuit against the Canada Revenue Agency.

Hal Neumann, with wife Maureen Rivers, has been awarded $1.3 million in a lawsuit against the Canada Revenue Agency.
Photograph by: Darren Stone, Victoria Times Colonist

A B.C. Supreme Court jury has awarded a Saanich businessman $1.3 million in damages after finding the Canada Revenue Agency breached his right to be free from unreasonable search and seizure under the Canadian Charter of Rights and Freedoms.

The jury also recommended the minister of revenue apologize to Hal Neumann for the Sept. 7, 2005, search of his home by five CRA agents and two armed and uniformed police officers for documents he had already given the government.

“This jury has told government agencies, ‘Be careful,’ ” said Neumann’s lawyer, Steven Kelliher.

Neumann called the verdict a victory for “ordinary folks in Canada who have been pushed around for far too long.”

“Never in my wildest dreams would I have imagined this,” he said.

Richard Neary, who was part of the legal team, called the decision earth-shattering. “It’s a landmark in law in terms of the recognition of the vital importance that the charter plays and the respect with which it needs to be upheld.”

The jury found Neumann’s right to privacy, which CRA employees infringed, was worth $1 million. The jury also found the CRA employees were negligent and damaged Neumann. They awarded him $150,000 for pain, injury, suffering and loss of enjoyment of life, $100,000 for aggravated damages and $50,000 for loss of income.

The CRA is reviewing the decision and considering its next steps, media relations spokesman Noel Carisse said from Ottawa.

Neumann, who was born in East Germany and escaped with his family to refugee camps in West Berlin, launched the civil suit because he felt bullied and terrorized in the search. He has suffered from depression, paranoia and post-traumatic stress disorder ever since the search, court was told.

Last week, the jury heard Neumann was never the subject of a CRA investigation, but an innocent third party. In 2004, his business went through a successful audit. During the audit, however, the CRA learned that Leah Bonnar, an Alberta woman Neumann did business with, had received commission cheques from him. She later became the focus of a CRA tax-evasion investigation. Neumann gave the auditor his original documents concerning Bonnar. Those documents, which were photocopied and returned to him, were the same ones later sought in the search warrant.

Neumann was at home on the morning of Sept. 7, 2005, when he saw police cars driving into his small cul-de-sac. When he answered the door, a CRA investigator told him she had a warrant to search his home for records regarding the Bonnar investigation.

When Neumann asked her why the CRA was accompanied by police, the police officer said in most such searches, everyone in the house is arrested.

Neumann complied with orders to pull out all the cash he had in the house, and took a computer expert upstairs to his office to download anything he wanted. The search lasted several hours.

University of Victoria law professor Rebecca Johnson said there have been few awards in Canadian history for damages stemming from breaches of charter rights. In 1998, an unidentified woman was awarded $220,000 after suing Toronto police for violating her constitutional right to equality and for breaching the duties they owed her. She had argued that police should have told her she was a potential victim of the man known as the balcony rapist because of where she lived.

The Neumann case is groundbreaking, said Johnson, in that the jury’s decision reflects the fact that it was an unreasonable and unnecessary search.

“This is a very big fine against a powerful agency. It means the CRA will have to take very seriously the human dignity of the people whom they investigate,” said Johnson.

“This would be completely upsetting for any ordinary citizen to have five agents and two police officers show up at your house and tell you they can arrest you. It would be absolutely traumatizing and it would shake your faith in our system of justice.”

ldickson@tc.canwest.com

This entry was posted on February 13, 2009 at 6:52 am and is filed under Audits, Tax Topics, The Tax System, The Law in Canada. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response or trackback from your own site.

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3 Responses to “Tax agents rebuked, $1.3 million awarded to man who was target of raid”

  1. Michel says:
    February 13, 2009 at 10:46 am

    You have just made my day!! Thank you for posting this news…it is about time.

  2. rexincr says:
    April 5, 2009 at 12:36 pm

    I got home to find this little bit of news waiting. Not that it comes as any surprise but you would think that a lawyer or two could figure out BEFORE the case went to court who has jurisdiction, don’t cha ??? Anyway here it is. Wonder how long they will delay this one!

    Tax Man Appeals $1.3 million award according to www.saanichnews.com

    by Vivian Moreau (News Staff)

    A Saanich business man who won a landmark settlement against Canada Revenue Agency said he is ready to go to court again. The agency announced last week they will appeal the $1.3 million that the B.C. Supreme Court awarded Hal Neumann. The jury felt CRA investigators breached Neumann’s right to be free from unreasonable search and seizure under the Canadian Charter of Rights and Freedoms.

    “I’m into it this far. I’m going to see it through to the end, “Neumann said.

    His lawyer has told him the CRA will argue that the B.C. Supreme Court did not have the jurisdiction to hear the case.

    “It’s an issue that should be of great interest,”he said. “It really concerns the essence of rights of innocent people in this country that most people take for granted: that the government says they have the right to come into your home and do whatever they want.”

  3. rexincr says:
    April 24, 2009 at 2:30 pm

    Here we go again! On Yahoo today:

    A B.C. taxpayer who fought the Canada Revenue Agency over a million-dollar tax bill he didn’t owe and won says the federal government misled him to believe he would be compensated for his financial losses.
    ADVERTISEMENT

    “They’re trying to now find a way to shove this under the rug or silence it so that they don’t get embarrassed,” 64-year-old Prince George resident Irvin Leroux said.

    “Promises have been made at the political level,” added his wife, Jill Moore, “and still, here we are.”

    Correspondence suggests Leroux’s MP, Conservative Dick Harris, was assured three years ago by the minister responsible that the government was prepared to compensate Leroux for Canada Revenue Agency errors that cost Leroux his business and his home. That settlement has not materialized.

    “They took everything I was, everything I stood for, and destroyed it,” Leroux said.

    CBC News made several requests to talk to Revenue Minister Jean-Pierre Blackburn about Leroux’s case but received no response.

    Before their fight with the taxman, Leroux and his wife owned and operated a successful RV park in Valemount, B.C. In 2002, Irvin’s RV Park and Campground was awarded the prestigious SuperHost customer service award by B.C. Tourism.

    Leroux said his tax troubles began in 1996, when an auditor from the tax agency showed up to look at the books. The auditor took Leroux’s business receipts and other records, he said, then misplaced those records at the CRA office.

    “He told me someone had put them on the pile that was to be shredded,” Leroux said.

    Without receipts to show his business expenses, numerous CRA audits over several years concluded Leroux owed almost $900,000 in personal income tax, plus over $100,000 in GST, including interest and penalties.

    “I said, ‘You had all of these records. You knew I had paid out those expenses. You lost them, and now you’re telling me that you are going to disallow them all?’” Leroux recounted. “I said, ‘That’s fine, I will seek a tax lawyer. I will see you in court.’ ”

    In 2005, he took his case to the Tax Court of Canada, where the CRA gave up in a so-called consent to judgment, essentially admitting its mistake. That reduced Leroux’s personal tax bill to zero and his GST bill to $20,000. Documents show that by 2006, Leroux was actually owed a $24,000 tax refund.

    Years before his case got to tax court, however, the CRA had obtained a writ of seizure and sale against Leroux’s properties so it could move in and collect on his alleged tax debt, if necessary.

    “These individuals have the right to come after every one of your assets without justification on what they are doing,” Leroux said.

    Because its security was suddenly at risk, Leroux’s main creditor the Business Development Bank of Canada demanded in 2001 that he pay back his very large business loan.

    That touched off a chain of events, Leroux said, that forced the sale at reduced prices of his business, his home and other assets, valued at approximately $4 million.

    “I lost my house, I lost my business, I lost my land, I lost my income, I lost my savings I lost it all,” Leroux said. “Why? Because [the CRA] wouldn’t admit to their mistakes. They would sooner destroy me and try to bury me out there than admit they did wrong.”

    “I’ve said to him the whole way, I will fight with you,” said Moore, his wife. “This is wrong. They can’t take it away and not even apologize. They can’t take it away and not be held accountable.”

    After Leroux’s tax bill was cancelled, his MP, 16-year veteran B.C. caucus chair Harris, stepped in and took his case to Ottawa.

    Correspondence shows that in 2006, Harris had several discussions with then minister of national revenue Carol Skelton a member of Prime Minister Stephen Harper’s cabinet urging her to arrange compensation for his constituent’s losses.

    At first, Skelton assured Harris that if Leroux filed a lawsuit against the government, an out-of-court settlement could be arranged, the documents suggest.

    In a letter to the minister, Harris repeated what she had led him to believe: “I was told that ‘CRA does not have a mechanism to proactively pay damages however if Mr. Leroux launches a court challenge with a statement of claim, the department could settle out of court.’ ”

    In an email to Leroux, Harris wrote: “I am convinced that things are going as we were promised. [The minister] wants the outcome of your case to be an example of how Revenue Canada must be held accountable for its abuses of Canadians.”

    Later in 2006, when there was no sign of a settlement in the works, Harris wrote this angry email to the minister’s assistant:

    “I am livid. This whole episode is the most inhumane treatment I have ever witnessed in my life. And I cannot believe that our own government would treat Canadians in this manner. Mr. Leroux is an honest, principled individual who had been driven to the brink many times by Revenue Canada. If Revenue Canada mount even the slightest objection to the statement of claim filing this week I ASSURE YOU AND THE MINISTER THAT ALL HELL IS GOING TO BREAK LOOSE. This is bulls–t!”

    Harris refused a request by CBC News to be interviewed about the affair, however, saying, “I don’t consider the work that I am doing for [Leroux], that it should become a news story, somehow.”

    In March, the CRA tried to have Leroux’s statement of claim thrown out of court. Leroux said he would have never filed the claim in the first place if he hadn’t been urged to by his MP, because he can’t afford a lawyer to pursue it.

    Leroux said he now feels betrayed by the Harper government, including the prime minister. When Harper himself was campaigning to be leader of the Conservative party, Leroux said, he spoke to the future PM at length about his fight with the CRA.

    “He said to me, ‘I guarantee you if I have your support and I get elected in as the leader of this party,’ he says, ‘I will give you my word I will look into this matter for you and get the matter resolved.’ Now, he’s forgotten my name.”

    “We’re tapped out,” Moore said. “There are no more lawyers we can pay. No more accountants we can hire.”

    “We don’t have a system in place to protect us,” Leroux added. “Because I’ve gone through the system. I’ve gone through the steps. And every time I walk the steps, I find there’s always something there to push me back down. Where is the justice?”

    Internal CRA emails written by assistant commissioner Rod Quiney in August 2006, obtained by Leroux under the federal access to information law, summarize the agency’s position in his case:

    “I believe we have been very fair and have in all respects provided the appropriate respect for his position and appropriate redress [by cancelling the debt],” Quiney wrote.

    “No compensation will be paid,” he concluded.

    Leroux is thoroughly disappointed in the Harper government he supported.

    “The people we elected to look after this stuff and protect us, they’re not there, because the bureaucrats who did all of this stuff are instructing the politicians on what to do.”

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