This is kind of interesting…. you would wonder how this even got to court. The case was so bad that the tax court striped CRA of $35,000 in costs that were awarded to the Plaintiff (The stripper).

Dan White

Stripper 1, Taxman 0
Article in Toronto Star,

Federal taxman gets caught with pants down in battle against Montreal peeler
Aug 20, 2009 03:54 PM
THE CANADIAN PRESS

MONTREAL – In its legal showdown against a tax-wary stripper, it’s the Canada Revenue Agency that’s been caught with its pants down.

The legal saga over $2 million in undeclared revenue began at Chez Paree – a pricey Montreal strip club patronized over the years by scores of wealthy executives and visiting athletes, including some very prominent hockey Hall of Famers.

Martine Landry was a dancer there and was particularly popular with one rich, elderly customer.

The publishing-industry magnate, now 80, began to introduce her to a world she knew nothing about.

He showered her with gifts worth about $2 million: a Corvette, money to buy a BMW, eight fur coats, jewels, a vacation, cash to buy a big downtown bar and get out of the dancing business, and $168,000 in $1,000 bills for a down payment on a house.

Landry, the adoptive daughter of a single mother, said her benefactor was impressed with her determination to succeed after a modest upbringing.

Like many Canadians, Landry had a difference of opinion with the federal taxman about how much money she actually owed.

The feds demanded $602,617 in taxes and penalties for the years 1998 to 2002.

But the Tax Court of Canada sided with Landry.

Judge Robert Hogan ruled the gifts, under Canadian law, could not be taxed.

Hogan also ruled that a more in-depth investigation by the CRA would have given them the answers they sought.

Landry was awarded $35,000, less than the $50,000 her lawyers had been seeking.

But the story’s not over: Revenue Quebec still wants $643,000 in taxes and penalties and that case is playing out in a Quebec court.

Landry is also now considering a lawsuit against the Canada Revenue Agency.

Her lawyer, Yves Ouellette, said in a radio interview he was pleased with the decision.