Comments on: “CRA versus the People of Canada.” http://blog.danwhite.ca/2010/08/16/%e2%80%9ccra-versus-the-people-of-canada%e2%80%9d/ Dan White's Personal Web Site where he provides information on tax topics in Canada. Tue, 22 May 2012 01:45:43 +0000 http://wordpress.org/?v=2.2.1 By: Grant Baudais http://blog.danwhite.ca/2010/08/16/%e2%80%9ccra-versus-the-people-of-canada%e2%80%9d/#comment-24499 Grant Baudais Tue, 17 Aug 2010 17:29:00 +0000 http://blog.danwhite.ca/2010/08/16/%e2%80%9ccra-versus-the-people-of-canada%e2%80%9d/#comment-24499 <p>Most Canadians are unaware of the fact that the word "income" is not even defined in the Income Tax Act. Even the Supreme Court acknowldges this (Ludco).<br /> It is logical to conclude though that in order to have "income", one must have a "source of income". And according to the Supreme Court in the Stewart case (2002),<br /> http://scc.lexum.umontreal.ca/en/2002/2002scc46/2002scc46.html, in order to have a "source of income", one MUST have an intent to profit. So what of you had no intent to profit from your activity? Is it not then logical to conclude that if you had no intent to profit from your activity, there is no "source of income", and if there is no "source of income". there is no "income", and if there is no "income", there is no tax to pay?<br /> The Supreme Court identifies an activity carried on with no intent to profit s a "personal endeavour", or hobby if you will. So, if you are carrying on a "personal endeavour" with no intent to profit, then why are you paying an "income" tax on the amounts you receive?</p> <p>The Income Tax Act is over 2500 pages long and is written in such form and language that even the "experts" have a difficult time coming to any agreement on its interpretation. So how do they expect the average Canadian to understand it? Perhaps the Act was written the way it is written to purposely deceive and confuse us into believing we have an intent to profit from our activities, i.e. a "source of income", so they could tax it!</p> MODERATOR'S COMMENTS. Hi Grant, Thanks for your comment. It is an interesting argument. The challenge with your thinking could be a lot of fun to pursue.... For instance, if you engaged in the thinking of "intent" all any business could simply start up for the purpose of having fun and have no intent of profit. The person would have to be willfully blind to the fact that they were making money. It got me thinking and I did some poking in the income tax act. While your argument has a logical thought train, it falls apart under the Income tax act. You are 100% correct. If you have no source of income, then you do not pay tax on the money that did not come in. I think you are right that income is not defined in the act. However what is "taxable income" is clearly defined. Thanks for playing with my head. I enjoyed the journey into the thinking. Best Regards Dan White www.taxauditsolutions.ca Most Canadians are unaware of the fact that the word “income” is not even defined in the Income Tax Act. Even the Supreme Court acknowldges this (Ludco).
It is logical to conclude though that in order to have “income”, one must have a “source of income”. And according to the Supreme Court in the Stewart case (2002),
http://scc.lexum.umontreal.ca/en/2002/2002scc46/2002scc46.html, in order to have a “source of income”, one MUST have an intent to profit. So what of you had no intent to profit from your activity? Is it not then logical to conclude that if you had no intent to profit from your activity, there is no “source of income”, and if there is no “source of income”. there is no “income”, and if there is no “income”, there is no tax to pay?
The Supreme Court identifies an activity carried on with no intent to profit s a “personal endeavour”, or hobby if you will. So, if you are carrying on a “personal endeavour” with no intent to profit, then why are you paying an “income” tax on the amounts you receive?

The Income Tax Act is over 2500 pages long and is written in such form and language that even the “experts” have a difficult time coming to any agreement on its interpretation. So how do they expect the average Canadian to understand it? Perhaps the Act was written the way it is written to purposely deceive and confuse us into believing we have an intent to profit from our activities, i.e. a “source of income”, so they could tax it!

MODERATOR’S COMMENTS.

Hi Grant,

Thanks for your comment.

It is an interesting argument. The challenge with your thinking could be a lot of fun to pursue…. For instance, if you engaged in the thinking of “intent” all any business could simply start up for the purpose of having fun and have no intent of profit. The person would have to be willfully blind to the fact that they were making money.

It got me thinking and I did some poking in the income tax act.

While your argument has a logical thought train, it falls apart under the Income tax act.

You are 100% correct. If you have no source of income, then you do not pay tax on the money that did not come in.

I think you are right that income is not defined in the act.

However what is “taxable income” is clearly defined.

Thanks for playing with my head. I enjoyed the journey into the thinking.

Best Regards

Dan White
www.taxauditsolutions.ca

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