2019 QCCQ 4130, 2019 QCCQ 4130

Goikhberg c. Agence du revenu du Québec 2019 QCCQ 4130 COURT OF QUÉBEC Administrative and Appellate Division CANADA PROVINCE OF QUÉBEC DISTRICT OF MONTREAL TOWN OF MONTREAL Civil Division No: 500-80-030541-156 DATE: April 8, 2019 ______________________________________________________________________ PRESIDED BY THE HONOURABLE DAVID L. CAMERON, J.C.Q. ______________________________________________________________________ YAFIM GOIKHBERG Plaintiff v.

L’AGENCE DU REVENU DU QUÉBEC Defendant ______________________________________________________________________ JUDGMENT ______________________________________________________________________ [ 1 ] The Plaintiff, Yafim Goikhberg, appeals from the assessments [1] issued by l’Agence du Revenu du Québec (“ Revenu Québec ”) for fiscal years 2006 to 2009 inclusively as confirmed by the decision on opposition dated January 5, 2015. [ 2 ] These assessments, as confirmed, have the effect of adding to the computation of Mr.

Goikhberg income the following amounts of “other incomes”: 2006 $107,523.15 2008 $87,142.85 2007 $153,927.70 2009 $170,795.43 [ 3 ] In support of his contestation of these assessments, Mr. Goikhberg asserts that he received, on or about 2008, transfers of funds from his parents who live in Israel of approximately $207,000.00. These funds were intented for the acquisition of a condominium and furnishings for their benefit.

He argues that his amount should not be included in his income. [ 4 ] He makes reference in his introductory motion to difficulties resulting from an access to information request which resulted in an incomplete access to documents that were seized by two police officers during his detention while awaiting his trial in a criminal matter. The indirect “cash-flow” method [ 5 ] Revenu Québec’s assessments resulted from the application of the method known as “mouvement de trésorerie” or “flux de trésorerie”.

The English term sometimes used is “cash-flow method”. [ 6 ] This method is resorted to by the ARQ in cases where taxpayers have not made appropriate declarations of their revenus and where it is not possible to establish their revenus by the direct analysis of the relevant documentation either because the documentation has not been provided or because it does not exist [2] . [ 7 ] In respect of fiscal years 2006, 2008 and 2009 Mr. Goikhberg did not produce any declarations of revenue. [ 8 ] In respect of fiscal year 2007, he declared his revenues as zero.

A search of Revenu Quebec’s systems revealed interest earned on bank deposits in the amounts of $1,344.00 for 2006, $2,888.00 for 2008 and $4,869.00 for 2009 which had not been declared. [ 9 ] Revenu Quebec’s auditor learned that Mr. Goikhberg had been convicted of criminal offences in 2009 and, according to Court documents, had been convicted before judge and jury on April 20, 2011 of several additional charges.

The facts on which the more recent case was based are described in a judgment on sentence written by the judge presiding the jury trial dated September 9, 2011 [3] . [ 10 ] The judgment describes an illegal scheme whereby Mr. Goikhberg, describing himself as an immigration consultant, or as a lawyer or sometimes as a translator, obtained funds from Russian immigrants and, purporting to assist them, took their identification documents,

replaced them with documents attesting a false identity and concocted a false narrative to justify a refugee application, thereby obtaining for them financial assistance. The funds were deposited to accounts opened under the false identifies. Mr. Goikhberg then himself used the bank cards on the accounts to withdraw the money for his own benefit. The application of the “cash-flow” method [ 11 ] The auditor’s hypothesis, used for the purpose of the assessment, was that Mr.

Goikhberg made significant gains from this illicit business venture and failed to declare them. [ 12 ] Proceeding mathematically and with great precision, the auditor established that the declared revenus were insufficient to support the ordinary expenses as declared. The discrepancy between the amounts entering his patrimony and the amounts flowing outword is the measure of the undeclared income. [ 13 ] In one of the responses given to the auditor, Mr. Goikhberg started that he received a gift of $300,000.00 from his parents who resided in Israel.

He stated having used the funds to pay down his own hypothec and to purchase another condo to be used by his parents, as they intended to establish their residence in Montreal. The auditor accepted the statement about the provenance of the funds, that they were a gift and established that the funds were used in the manner stated by Mr. Goikhberg. The amount of the transfer of funds was established however, with reference to the banking records that the auditor obtained, at $242,430.00. [ 14 ] This amount was treated as non-taxable income and excluded from the computation of “other income”. [ 15 ] Mr.

Goikhberg makes the point that the amount does not belong to him and should not be included in his income. This is an argument that has no bearing on the assessment: whether the money is his, because it was a gift to him, or whether it is not his, because it belongs to his parents, the Revenu Agency did not treat it as income in any event. [ 16 ] Mr. Goikhberg make much of his theory that the police authorities have as their goal to take his parents’ money and that this is part of an intentional “use of the judicial system to harm jews” [4] . [ 17 ] In assessing Mr.

Goikhberg’s income tax debt according to this method, Revenu Quebec is postulating that the income had three possible sources; amounts obtained by Mr. Goikhberg as an immigration consultant, appropriation of amounts from immigrants and interest on investments. [ 18 ] In the case of the assets used to produce income, the auditor considered the interest as declared by the financial institutions, used the institutions interest rates and calculated the capital amounts. These figures were used presumptively in the tables establishing the cash-flow fluctuations.

Principles applying to the presumption of validity. [ 19 ] In evaluating whether the presumption of validity of a fiscal assessment provided at

article 1014 of the L.I. applies, the Court has to determine whether the taxpayer has “destroyed” or “demolished” the presumption by presenting prima facie evidence to refute it.

If so, the burden of proof shifts to Revenu Quebec and the Court must then consider the evidence to determine whether the assessments have been established on the balance of probabilities. [ 20 ] The simple affirmation by the taxpayer as to the inexactitude of the declarations will not suffice: there must be a certain degree of precision and probability and documentary or circumstantial evidence to support the affirmation. [ 21 ] The evidence can consist in the sole testimony of the taxpayer, but it must be clear testimony of a witness whose credibility has not been put in doubt [5] , that stands up to cross-examination. [ 22 ] Mr.

Goikhberg denies having engaged in an immigration consulting service. He describes his services as translation and providing accommodation. He had records of his cash receipts but these were seized by the police. He speaks about his understanding that in 2007 his income was declared by his wife. He believes that the attempt by the authorities to take his parent’s money involved putting him in prison. He mentions the stay by a judge of the Superior Court of 149 charges taken against him. The fact that he was found guilty in 2011 shows the use of the judicial system to harm Jews.

The jury conviction looked to him as if it were “arranged”. Witnesses were induced to give false testimony. He admits that he “took” money, but denies the amounts. [ 23 ] In his rebuttal evidence, he speaks of a car that is part of the cash-flow analysis as not being his; he says he co-signed for a friend and did not make the payments.

The Court’s finding [ 24 ] The assessment was done using a cash-flow method that the Courts have endorsed in a very constant jurisprudence. [ 25 ] It was appropriate in this case for the Revenu Agency to resort to this method because the nature of the Plaintiff’s gains was such that no documentation was made or kept. In the audit process, the Plaintiff could not or would not provide any coherent information or explanation of this fiscal position. Even in the case of the gratuity received from his parents, he provided no accurate information.

The auditor acted property in ascertaining the banking and other records and was able to substantiate, for Mr. Goikhberg’s benefit, the exclusion of the amounts of the gratuity from the cash-flow entries, thus giving him the benefit of the doubt that these amounts did not

constitute income. [ 26 ] Nothing Mr. Goikhberg said at trial, including his misguided diatribes about what he perceives as persecution, sheds any light on the subject at hand, his income tax assessment, let alone constitute evidence that could have an impact on the presumption of validity of the assessments. [ 27 ] Therefore, the presumption has not been rebutted by prima facie evidence, and the assessments are confirmed as valid.

Penalties and prescription [ 28 ] It goes without saying that this was a clear case for the interruption of prescription and the application of the penalties imposed in the assessments process for repetitive, serious, willful and conscious omission to declare revenus and evasion of payment, in light of articles 1045 and 1049 L.I. (year 2007) and

article 59.4 (years 2006, 2008 and 2009) of the L.A.F. BY THESE REASONS, THE COURT: DISMISSES the appeal; CONFIRMS the assessments; WITH COSTS. ________________________ David L. Cameron, J.C.Q. Me Soleil Tremblay For the Plaintiff Me Rémi DROUIN LARIVIÈRE MEUNIER For the Defendant Date of hearing: November 22, 2018