R. v. Fischer Date:, 2013 BCPC 154

Citation: R. v. Fischer Date: 20130625 2013 BCPC 0154 File No: 23526-C2 Registry: Nelson IN THE PROVINCIAL COURT OF BRITISH COLUMBIA REGINA v. WARREN FISCHER REASONS FOR JUDGMENT OF THE HONOURABLE JUDGE L. MROZINSKI Counsel for the Crown: N. Preshaw, R. Brown Counsel for the Defendant: Ex parte Place of Hearing: Nelson , B.C. Date of Hearing: April 22, 23, 24, 25, 2013

Date of Judgment: June 25, 2013 Introduction [ 1 ] Warren Fischer is charged with three counts of making, assenting or acquiescing in the making of a false statement in his T1 Individual Tax Return for the taxation years 2007, 2008 and 2009 contrary to s. 239(1)(

a) of the Income Tax Act (the “ Act ”). He is also charged with one count of wilfully evading or attempting to evade payment of taxes imposed by the Income Tax Act contrary to s. 239(1) ((

d) of the Act . [ 2 ] These are my reasons in the trial of these charges which proceeded ex parte as Mr. Fischer, who has been a reluctant participant in this criminal process generally, did not attend. [ 3 ] In his various preliminary appearances before this court, Mr. Fischer was often uncooperative. He was reluctant to admit his name when his case was called. On his arraignment, Mr. Fischer was deemed to have entered a not guilty plea to the charges then before the court due to his many equivocations.

Following the setting of his trial date, the Crown sought and obtained a pre-trial hearing to address various anticipated trial issues such as arguments concerning the jurisdiction of these courts over persons like Mr. Fischer. Mr. Fischer appeared at his pre-trial conference on January 13, 2013 and I have no doubt he left knowing that his trial on these charges was set to commence on April 22, 2013. [ 4 ] Although there is good reason to suspect that Mr. Fischer is a “tax protestor” as Crown often referred to him throughout the trial, Mr.

Fischer’s absence from his trial resulted in there being no submissions in support of any of the now infamous theories of tax protestors in this country and elsewhere. In the result, the issue at trial was whether the Crown had proven beyond a reasonable doubt that Mr.

Fischer intentionally or wilfully misstated his income on his 2007, 2008 and 2009 Income Tax Returns and, if so, whether he did thereby wilfully evade or attempt to evade payment of taxes as required by law. [ 5 ] As there were no admissions in this case, much of the trial time was taken up by a succession of Crown witnesses who testified regarding the execution of search warrants at Mr. Fischer’s residence and at his place of business, the Academy of Classic Oriental Sciences (“ACOS”).

The purpose of this evidence was to establish continuity of the documents seized in the search and entered as evidence in this trial. [ 6 ] The substance of the Crown’s case, in which witnesses described the process of Revenue Canada’s review and audit of the seized documents to demonstrate the filing of false returns and tax evasion, occupied much less time. This evidence was ultimately very straightforward and involved a review of various invoices, business records, cheques and banking statements, all of which demonstrated Mr. Fischer’s actual income for the years charged.

After calculating his expenses Revenue Canada arrived at what it submits is a calculation of Mr. Fischer’s actual taxable income for the years charged. These calculations of course do not accord with Mr. Fischer’s Income Tax Returns for these same years and he is for that reason subject to these charges. Revenue Canada’s Audit of Mr. Fischer [ 7 ] Mr. Fischer and ACOS came to the attention of Revenue Canada in the year 2010 for two reasons.

John Amm, an Auditor with the Canada Revenue Agency, testified that in May, 2010 he was assigned to conduct an audit of ACOS after a sale of ACOS shares occurred that appeared suspect. Another issue that caught the Agency’s attention was that one of ACOS’ shareholders, Mr. Fischer, had declared income in the amount of $1.00 for the tax years 2007 and 2008. [ 8 ] Information respecting Mr. Fischer’s income tax returns for the years 2004 to 2008 was entered as evidence in this trial pursuant to s. 30(1) of the Canada Evidence Act , R.S.C., 1985, c. C-5. Mr.

Fischer’s 2009 Income Tax Return, which was a paper filing, was also entered into evidence. The evidence demonstrates that up to the tax year 2007, Mr. Fischer had reported net income well over $100,000.00 per year, particularly in the case of the year 2004. Not surprisingly, his declaration of income in the amount of $1.00 per year in the years 2007 and 2008 attracted notice. [ 9 ] Mr. Amm conducted an income tax audit at ACOS in Nelson in July, 2010. He also spoke to a person who identified himself as Warren Fischer, but Mr. Amm never met Mr. Fischer in person. I am satisfied on the evidence that Mr.

Fischer knew of the audit being conducted at ACOS and was apprised of the Agency’s concerns about his own tax returns. [ 10 ] After concluding his audit at ACOS, Mr. Amm proposed an income for Mr. Fischer for 2007 in the amount of $81,031.00. He proposed an income for Mr. Fischer for 2008 in the amount of $103.024.00, and for 2009 in the amount of $104,761.00. As Mr. Amm testified, Mr. Fischer’s tax return for 2009 was more complicated than for the previous two years in that Mr. Fischer claimed a large business loss which more than outweighed his claimed income for the year. Mr.

Amm testified that he found no records to support the business loss claim in Mr. Fischer’s 2009 return. The Agency’s other concern about the transfer of ACOS shares appears to have resolved itself after Mr. Amm’s audit. [ 11 ] Mr. Amm sent Mr. Fischer a letter proposing the income amounts he had assessed for the years at issue. Mr. Amm also referred the file to the Enforcement/Investigation division of the Audit Department of the Canada Revenue Agency. While some individuals do settle their accounts by paying the amount proposed by the Agency this option was foreclosed in the case of Mr.

Fischer when the Enforcement/Investigation division accepted Mr. Amm’s referral. From that point on, Mr. Fischer’s file was the subject of an investigation by the division. Continuity [ 12 ] Brenda Rahier, a long time CRA auditor and investigator with the Enforcement/Investigation division, assumed conduct of Mr. Fischer’s file in 2010. Ms. Rahier sought and obtained two warrants authorizing a search of Mr. Fischer’s residence and the premises of ACOS in Nelson, British Columbia where she suspected she would find evidence of offences under the Act .

[ 13 ] The warrants authorized investigators to search for documents related to Mr. Fischer’s banking, accounting and other financial records, correspondence from or about the Canada Revenue Agency, T1 Income Tax Returns pertaining to the years 2006 to 2009 as well as information related to the Goods and Services Tax for those years. [ 14 ] The Crown called eighteen witnesses who testified regarding their participation in the execution of the search warrants at these two locations. Each detailed their role in the search.

Through these witnesses, I am satisfied beyond any doubt that the Crown has established continuity between the documents seized pursuant to the warrants and the documents entered into evidence in this trial. [ 15 ] It is clear from the evidence that a great deal of planning went into the execution of the warrants. Several days in advance of the executions of the warrants, the search team as I will call it met and reviewed the terms of the warrants. The team divided itself roughly in two with certain persons being assigned to the search of Mr. Fischer’s residence and others being assigned to the search of ACOS.

As the search of the residence took less time than the search of ACOS, some members participated in both searches. I am satisfied they had reviewed both warrants and understood the terms of each. [ 16 ] Each team was headed by an officer in charge (an “OIC”). Each team included a second officer in charge and that person also served as the ‘records custodian’ responsible for taking conduct of, recording and securing documents seized by the searchers. As the lead investigator during the search process, Ms.

Rahier’s role was to make herself available to answer questions posed by the two OIC’s, and on occasion by searchers who otherwise reported to the OIC’s. [ 17 ] The searchers in each location were assigned specific search areas. Searching in pairs, they were given envelopes with pre- fixed labels denoting the case name and number, the lead investigator, the name of the OIC, and the location to be searched being either Mr. Fischer’s residence or the premises of ASOC.

Items seized by the searchers were then placed into these envelopes whereupon the searcher wrote on another label also affixed to the search envelope the precise location of the item seized as well as a description of the item, the name of the searcher, and the date of the seizure.

Each searcher also drew a rough diagram of the location of the seized item and labelled the envelope in accordance with the location of the item seized. [ 18 ] As each searcher completed a search envelope, he or she passed it directly to the records custodian. [ 19 ] At each search location, the OIC presented the search warrant and took overall responsibility for the search. [ 20 ] Ellen Engensperger, an officer employed by the CRA since 1989, was assigned as the OIC of the search of Mr. Fischer’s residence. Ms.

Engensperger testified that she attended at the residence listed in the warrant and there met a man at the door whom she believed was Mr. Fischer. Ms. Engensperger served the warrant on that individual and cautioned him. [ 21 ] While conducting a search of this location, Ms. Engensperger viewed a photograph in the home which was seized. Ms. Engensperger was convinced the man in the photograph was the same man who had answered the door and the man she knew to be Warren Fischer. [ 22 ] In the course of the search, a safe was located.

The man who had answered the door and then been allowed to leave the premises was called and returned and that same individual opened the safe. Ms. Engensperger had no doubt that the individual was Mr. Fischer. [ 23 ] The records custodian responsible for the documents seized at Mr. Fischer’s residence was Kelly Plato. Mr. Plato testified that he received search envelopes from seven searchers at the residence and placed those documents into one of two boxes after labelling their box numbers on the envelope. Those boxes were in his possession at all times while at the residence. Upon completion of the search, Mr.

Plato brought both boxes to his vehicle and with Ms. Engensperger, transported the boxes to the Nelson City Police station. There, with the assistance of NCPD officers, he deposited the two boxes into the exhibit storage room. Mr. Plato was satisfied the boxes were secure in that locked facility. [ 24 ] The records custodian for the documents seized at the premises of AROC was Natalie Guttman. Ms. Guttman was also the second OIC to Mr. Matheson, the OIC of the search at AROC. [ 25 ] Ms.

Guttman testified to receiving search envelopes from twelve searchers at AROC and placing those envelopes into three boxes after noting them on a tracking sheet. Those boxes containing the envelopes were in her immediate possession at all times while she was at this search location except for a brief period between 2:11 and 2:21 pm when she placed them under the care of another member of the CRA search team. When she returned that officer was still with the boxes. [ 26 ] Ms. Guttman turned all three boxes over to Ms. Rahier, the lead investigator at approximately 2:43 pm. Ms. Guttman, Ms. Rahier, and Mr.

Matheson each carried a box to their vehicle and from there transported the boxes to the Nelson City Police station. There, with the help of NCPD officers, the boxes were placed in the exhibit storage room; a secure room not accessible to members of the public. [ 27 ] In addition to the documents seized at Mr. Fischer’s residence, CRA officers also seized his computer hard drive. Jonathan Sue, a computer specialist employed by the CRA, testified that he attended at Mr. Fischer’s residence after Ms. Engensperger had executed the warrant at that location on March 23, 2011.

Other searchers were present at that location when he arrived as was Steve Joy, another computer specialist with the CRA. [ 28 ] Mr. Joy directed Mr. Sue to a computer in the office area of the residence. The computer was password protected and as Mr. Fischer had not provided the password, Mr. Sue utilized his knowledge to ‘get past the password’ as he called the process. Mr. Sue quickly noted two files on the computer that related to the search warrant and on that basis decided to seize the hard drive. He then made a copy of the hard drive, put that into the computer and seized the original. Mr.

Sue transported the hard drive to Vancouver where he deposited it in CRA’s secure computer lab; a facility not accessible to members of the public. [ 29 ] Mr. Sue testified that the hard drive did not leave his possession from the time he seized it to its deposit in Vancouver. He

agreed that the hard drive was left in his hotel room briefly on the evening of March 23, 2011 while he went out for dinner. However hetestified that his room was locked and there is no evidence to indicate any unauthorized entry into the room over this period. [30] Mr. Sue was satisfied the hard drive was secured in the CRA lab in Vancouver upon his return. [31] The hard drive was then reviewed in Vancouver by CRA officer Olivia Chui. Ms. Chui testified that after reviewing the searchwarrant, she reviewed the hard drive on a secure system and prepared an initial report within about two months.

This report wasfollowed by two supplemental reports, one of which was sent to Ms. Rahier through inter office mail and the other copied onto a disk anddelivered to Ms. Rahier by Mr. Matheson. [32] All of the documents seized from Mr. Fischer’s residence and the premises of ASOC were, I am satisfied, passed on to theappropriate records custodian who in turn ensured their continuity by attending while the documents were placed in a vehicle andtransported to the Nelson City Police Department exhibit room lock up. [33] On March 24, 2011, Ms.

Rahier, CRA officers Dave Matheson, Elizabeth Wade, and Natalie Guttman attended at the NelsonCity Police Department and obtained the boxes of documents seized from both Mr. Fischer’s residence and the premises of ASOC andtransported those documents to the CRA office in Penticton. Mr. Matheson testified that he placed all five boxes of documents into thebond room; a secure room on the floor of the CRA building in Penticton occupied by the Enforcement/Investigation Branch and notaccessible by the public or other CRA employees without a pass. [34] The bond room is, without question, a secure facility.

As required, shortly after the search concluded, each searcher attended atthe Enforcement/ Investigation division of the Audit Branch of the CRA to inventory their documents. The searchers, except the fewwho were with the Enforcement/Investigation division, were given entry to an area near the bond room and there were provided withtheir envelopes which they inventoried and returned to an investigations officer who returned the envelopes back to the bond room.

Allof the searchers testified that their documents were in the bond room before their inventory and returned directly to the bond room aftertheir inventory. [35] All of these documents were then reviewed by Ms. Rahier who produced from them a number of documents upon which theCrown bases its case against Mr. Fischer. There is no question the Crown has established that the CRA maintained continuity andpossession of the documents seized pursuant to both warrants from the time of seizure to the time of trial. The Identity of Mr. Fischer [36] Aside from Ms.

Engensperger, who testified that she served the warrant on Mr. Fischer at the door of his residence on March23, 2011, CRA officer Julia Jennex recalled being introduced to Mr. Fischer in the kitchen of his home that same morning. Ms. Jennexfound a birth certificate for Warren Fischer at the residence and seized that document which was entered as evidence in this trial. [37] CRA officer Michelle Roy, assigned to search Mr. Fischer’s residence, also recalls being introduced to a man said to her to beWarren Fischer. Ms.

Roy noted that the man she was introduced to was the same person shown in photographs in the home known to bethe residence of Warren Fischer. Ms. Roy also saw the same man, whom she identified as Mr. Fischer, on the steps of the courthouse onthe day she testified. [38] CRA officer Elizabeth Wade, also assigned to search Mr. Fischer’s residence, recalled being introduced to Mr. Fischer by Ms.Engensperger at the time of the search. Ms. Wade also recalled seeing the same individual outside the courthouse on the day of hertestimony. [39] Among the various documents identifying Mr.

Fischer seized at his residence were an expired Canadian passport issued to Mr.Fischer in Beijing, a social insurance number card issued to Warren Fischer, a Canadian Acupuncturist and TCM Alliance of BC ID cardissued in 1999, a voter’s card, and dated student ID. [40] I have no doubt that the residence upon which the search warrant was executed was Mr. Warren Fischer’s residence, that theperson who presented himself at the door and returned to open the safe at the residence was Mr. Warren Fischer, and that this person isthe person who attended at this court from time to time on this matter.

It remains to be determined whether the Crown has provenbeyond a reasonable doubt that this same Warren Fischer is guilty of filing false income tax statements and evading the payment ofincome tax as required by law. The Issues [41] To prove counts 1 to 3, the Crown must, as it concedes in its written submission, prove that false statements were filed by Mr.Fischer. As for count 4, the charge of evasion, the Crown relies on the comments by the Ontario Court of Appeal in R. v.

Klundert (No.1) (ONCA) at para 40 that the actus reus of tax evasion is made out if: ...the Crown provides that the accused voluntarily performed

an act or engaged in a course of conduct that avoided or attempted to avoidpayment of tax owing under the [Income Tax] Act. [42] The Crown relies on para 47 of Klundert for the proposition that an accused will have intended to commit tax evasion if thefinder of fact is satisfied beyond a reasonable doubt that the accused did something or engaged in a course of conduct that avoided orattempted to avoid the payment of tax, knew there was a tax imposed by the Act and engaged in the conduct for the purpose of avoidingor attempting to avoid payment of tax. [43] As Mr.

Fischer has not participated in this trial, his intent must be inferred from all of the evidence. In its submissions, preparedlikely before the commencement of trial, the Crown devoted some thirty paragraphs of its argument to the proposition that even were I tofind that Mr. Fischer sincerely believed in the correctness of the teachings of various tax protest groups that he was under no legalobligation to pay income tax, he must still be found guilty.

[44] The tax protestor movement loomed somewhat large in this trial not only because of the manner in which Mr. Fischerconducted himself in his various appearances before this court, but also given the documents found at his residence suggesting he was astudent of the tax protest movement. [45] Though this court is aware that there is an association in the evidence between Mr. Fischer and the tax protest movement whichhas been so fully described by Rooke A.C.J. in Meads v. Meads, 2012 ABQB 571 , [2012] A.J. No. 980, that issue is not beforeme.

While the court has many obligations to the accused in the context of an ex parte trial, or even with regard to a self representedaccused, that obligation cannot go so far as to require the Court to raise or consider the sorts of arguments that may be made by taxprotestors in regard to these charges as an example. [46] In my view the narrow question in this trial given Mr. Fischer’s decision not to participate in it, is whether there is proof beyonda reasonable doubt to support the charges and whether I can draw from the evidence the requisite intent or mens rea. I accept, however,that some evidence regarding Mr.

Fischer’s involvement in the tax protest movement is relevant with respect to mens rea in this case. The Evidence of False Statements and Tax Evasion [47] Once the seized documents and records were secured in the CRA offices in Penticton, it was left to lead investigator BrendaRahier to then sort through the material, categorize it and review it. Ms. Rahier testified that she worked on the file for about a yearfollowing the execution of the search warrant before these charges were laid. [48] As was evident in the Crown’s Exhibit Index, Ms.

Rahier organized the material into various categories so that it was apparentwhere the documents were seized, what the documents were, and what tax year the documents related to. Other sundry documentsincluded seized bank records, documents linking Mr. Fischer to the Paradigm Education Group and Fiscal Arbitrators, both well knowntax protestor groups, Mr. Fischer’s identification records, and various corporate and title records. The Tax Year 2007 [49] CRA electronic records attached to the affidavit of Ms.

Rahier, and filed in this trial pursuant to s. 30 of the Canada EvidenceAct, indicate that in his e-filed tax return for 2007, Mr. Fischer reported a total income of $1.00 for the tax year 2007 and a net income of$1.00 for that same year. In past years, as I have noted, his reported income was much higher. [50] Following the execution of the search warrant at the premises of ACOS, the CRA found various documents entitled ‘ACOSOutpatient Clinic, Clinic Compensation’. The documents list various names under which various line items are listed in table form.

Under the initials WJF, which the CRA maintains are the initials for Mr. Fischer, a number of fees and items are noted and ultimately afigure denoted as “commission owing” is attributed to WJF as it is to other persons on the list. Searchers found in addition cheque stubsmade out to Warren Fischer in the same amount as denoted in the “commission owing” columns. This information was obtained for themonths of January to December, 2007. [51] In the seized documents, Ms.

Rahier also located copies of cheques made out to Warren Fischer from ACOS in the sameamounts as denoted in the Clinic Compensation Table and the cheque stubs. Finally, through a review of Mr. Fischer’s banking records,Ms. Rahier was able to locate copies of those same cheques cashed and deposited into Mr. Fischer’s Scotia Bank account. [52] In all, Ms. Rahier calculated that Mr. Fischer received commissions from ACOS from January to December, 2007, in theamount of $81,031.55. The gross amount payable to him according to ASOC invoices was $106,988.30. [53] Other records seized from ACOS indicate that Mr.

Fischer received and cashed cheques from ACOS for services renderedunder a private employment contract in the amount of $9,598.00. These were totals of three invoices billed to ACOS by Mr. Fischer inhis “capacity as a natural person working for his own benefit...”. Ms. Rahier found that the cheques had been cashed and deposited inMr. Fischer’s Scotia Bank account in the year 2007. [54] In total, Ms. Rahier calculated that Mr. Fischer’s 2007 gross income amounted to $116,586.30. When his expenses, some ofwhich were listed in the commission table, were deducted, and his PST and CPP obligations adjusted, Ms.

Rahier calculated that Mr.Fischer’s taxable income for 2007 was $83,981.52. A far cry from the claimed amount of $1.00. [55] I am left with no doubt on the evidence that Warren Fischer filed a tax return for the tax year 2007 in which he claimed a totaland net income of $1.00. I am also left in no doubt on the evidence that Mr. Fischer received income far in excess of the $1.00 amountclaimed. I find that Mr. Fischer earned income for the tax year 2007 in the amount of $83,981.52. [56] Section 239(1)(

a) of the Act requires that the Court be satisfied the accused filed a tax return and that the return was false. I amsatisfied that both those elements have been proven in this case with regard to count 1 of the Information. Warren Fischer did not file atax return for the tax year 2007 that reflected anything near the income he earned which I find was $83,981.52. The Tax Year 2008 [57] Among other things, Mr. Fischer’s 2007 e-filed tax return was given a “prepare number”. That is a number assigned to theperson who electronically made the tax return. That same number was used on Mr.

Fischer’s 2008 tax return filed on April 29, 2009, inwhich he declared a total income and net income in the amount of $1.00. [58] As was the case with his 2007 income, records found at ACOS entitled ACOS Outpatient Clinic, Clinic Compensation, indicatethat WJF was owed gross commission for the months January to December, 2008, in the amount of $136,493.10. His net commissionfor the year 2008 amounted to $103,024.38. Again, Ms. Rahier found cheque stubs except for the commission owing in February, 2008,but even then found copies of the negotiated cheques for the whole year.

All but the cheque for October, 2008, which was negotiated,show up as having been deposited into Mr. Fischer’s Scotia Bank account. The October cheque in the amount of $9,767.75, which onthe evidence was cashed, is not reflected as having been deposited in Mr. Fischer’s bank records. Instead, a deposit in the amount of

$9,807.75 is shown. However, little turns on this slight discrepancy. Ultimately, there is no question that Mr. Fischer earned income in 2008 which he did not report. [ 59 ] In addition to the commissions paid to Mr. Fischer for his acupuncture services, he received in 2008 a cheque in the amount of $10,000.00 for services rendered “in his capacity as a natural person working for his own benefit” under IMeG Health Link Management Inc. An invoice dated November 28, 2008 indicates that the service provided was the submission of a draft clinical manual report.

The cheque was cashed and deposited into his Scotia Bank account on December 22, 2008. [ 60 ] Ms. Rahier calculated Mr. Fischer’s gross income for 2008 was $146,493.10. When his expenses were deducted, and GST and CPP adjusted, Ms. Rahier calculated that Mr. Fischer’s net income for 2008 was $101,701.24. Again, a far distance from his claimed amount of $1.00. [ 61 ] I am satisfied beyond a reasonable doubt that the tax return filed by Mr. Fischer for the year 2008 was false in that he made far in excess of the $1.00 he claimed as his total income. The Tax Year 2009 [ 62 ] As Ms.

Rahier explained, the charges in regard to Mr. Fischer’s 2009 income tax return are made slightly complicated by the fact he claimed income and a business loss, neither of which are accurate. [ 63 ] For the tax year 2009, Mr. Fischer filed a paper return, a copy of which is attached to Ms. Rahier’s affidavit dated January 16, 2013 and entered into evidence in this trial pursuant to s. 244(9) of the Income Tax Act . [ 64 ] In that return, Mr. Fischer listed himself as the director of a numbered company which numbered company is listed as having issued a dividend to him in 2009 in the amount of $37,500.00. Mr.

Fischer also declared a business loss in the amount of $148,646.00. With the declared income, he declared a capital loss to be carried back to 2006 in the amount of $111,146.00 which he applied to taxes paid in 2006. [ 65 ] Mr. Fischer was given a tax refund for the year 2009 in the amount of $75.00 which he cashed. Had his capital loss claim been allowed, he would also have been refunded income tax paid for the year 2006. It was not however allowed as the CRA found no evidence to substantiate the business loss. Moreover, documents and records obtained in the search indicate that Mr.

Fischer earned a net income of $135,539.21 for the year 2009. Again, an amount inconsistent with his claimed income for that year. [ 66 ] As was the case for the previous two years, CRA searchers found documents at ASOC showing Mr. Fischer was allocated commissions for his clinic services in the gross amount of $138,631.70 for the months January to December, 2009. Cheques were made out to him for each of these months for a yearly net total of $104,761.33. Cheque stubs for all but the month of August, 2009, were located and evidence of the negotiated cheques was found in regard to every monthly payment for 2009.

Corresponding bank statements showed these cheques deposited into Mr. Fischer’s Scotia Bank account for each month but December, 2009. In that case, however, there was evidence that the cheque was cashed at the Scotia Bank in January, 2010. [ 67 ] In addition to this income, Mr. Fischer cashed a cheque made payable to him by IMeG, dated January 29, 2009, in the amount of $5,424.60. Ms. Rahier attributes $424.60 of that amount to expenses being repaid to Mr. Fischer. [ 68 ] Based on the records seized and reviewed, Ms. Rahier calculated that Mr.

Fischer’s gross income for 2009, including the dividend claimed in his filed return, amounted to $181,131.70. When his expenses were deducted, and his income adjusted for GST and CPP, Ms. Rahier calculated that his net income amounted to $135,539.21. As noted, Mr. Fischer claimed a loss for that year in the amount of $111,146.00 which he hoped to apply to taxes paid for the year 2006. [ 69 ] Two audits, one conducted by Mr. Amm and one by Ms. Rahier could find no evidence to substantiate Mr. Fischer’s business loss claim for the year 2009. On the other hand, there is no question the Crown has proven that Mr.

Fischer received income that year in the amount of $135,539.21, of which he claimed only the dividend of $37,000.00. Although Mr. Fischer is not required to prove his innocence, the overwhelming evidence that he did not report income for 2009, coupled with the lack of any evidence to support his business loss claim in the face of two audits, leads me to infer on all the evidence that Mr. Fischer did understate his income for 2009 as charged in count 3. Tax Evasion [ 70 ] Count 4 of the information charges that Mr.

Fischer did wilfully evade or attempt to evade payment of taxes imposed by the Act by failing to report income in the amount of $321,221.97 for the 2007, 2008, and 2009 taxation years and did thereby evade payment of federal taxes in the amount of $62,238.51, thereby committing an offence contrary to para 239(1)(

d) of the Act . [ 71 ] I have already found that Mr. Fischer did fail to report income for the years charged. [ 72 ] With respect to his intent or mens rea , I have been guided by the discussion of the Ontario Court of Appeal in R. v. Klundert where, at para 45 , the court accepted that the Act is complex and that persons who out of mistake or ignorance fail to pay their taxes may not meet the fault requirements in s. 239(1)(

d) of the Act . If there was some evidence on which it could be inferred that Mr. Fischer mistakenly failed to report his income due to lack of knowledge, reliance on an expert, or a mistake of law, an acquittal might follow. But here, there is no such evidence. Rather, the evidence linking Mr. Fischer to the tax protest movement, including his own emails, suggests an intention not to pay tax. It is clear that refusing to pay income tax because one disagrees with the law itself is not a defence. Even without this evidence, Mr.

Fischer’s tax returns for the years 2007, 2008 and 2009 are so far from his earned income, which he deposited regularly into his Scotia Account, there can be no question and I find that Mr. Fischer did not do so in error. [ 73 ] The Crown submits that Mr. Fischer evaded payment of federal taxes in the amount of $62,238.51. However at this juncture it is unnecessary for me to make a determination as to the precise amount of the evasion. As the Crown submits, R. v. Alexander Street

Lofts Development Corporation Inc ., 2007 ONCA 309 , provides sound authority for the proposition that the precise amount alleged in the count is not an essential element of the offence charged. The charge may be made out if the court is satisfied beyond a reasonable doubt that the accused has failed to report income, not by reason of a mistake or ignorance, but knowing taxes were due and failing to report that income for the purpose of evading taxes. I am satisfied on the evidence in this case beyond a reasonable doubt that Mr.

Fischer did fail to report income for the years 2007, 2008 and 2009 for the purpose of evading the payment of taxes. Whether he sincerely believed he had no obligation to do so as a person protesting taxation generally is of no moment. [ 74 ] Given these reasons, I find Mr. Fischer guilty on all counts. As counts 1 to 3 are lesser included offences, I will enter a stay on those counts. Mr. Fischer is convicted on count 4 of the information with having committed the offence of tax evasion contrary to s. 239(1)(

d) of the Act . _________________________________ The Honourable Judge L. Mrozinski