Thursday, May 02, 2013

"Minister, for once in your life you need to listen to me!" ..... The Fuller Brush Man

"After reading this story you need to by a .... load of my high quality toilette brushes and several 45-gallon drums of CLR to give your Agency a good scrubbing!"
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'I want my life back': After more than a decade British Columbia man still fighting to right damages wrought by tax agency

By Tristin Hopper
Friday, April 26, 2013
CRA's latest application for dismissal which alleged that Irvin Leroux's statute of limitations had run out. (Jill Moore)

Three years ago, after hearing Irvin Leroux’s account of his years-long odyssey against the Canada Revenue Agency, a B.C. Supreme Court justice wrote that the events sounded nothing less than “Kafkaesque.”

Eighteen years ago, says Mr. Leroux, he was in midst of a routine audit when CRA employees accidentally sent his tax documents to the shredder. Then, without any documentation to defend himself, they levied an exorbitant $640,000 bill against him.

In the grinder of assessments, reassessments and collection procedures that followed, Mr. Leroux saw his budding business empire collapse, his finances ruined and his retirement reduced to a steady stream of appeals, filings and courtroom hearings.

Nowadays, Mr. Leroux simply refers to his situation as being “Lerouxed.”

“It’s like David and Goliath, but at least David had a nice sling,” he said, speaking by cell phone from Prince George.
"All I want is my life back, I want what they caused me to lose"
CRA’s latest application for dismissal, which alleged that Mr. Leroux’s statute of limitations had run out, was thrown out this week.

The episode’s next chapter is set to unfold in September. In a Prince George courtroom, Mr. Leroux will attempt to prove that the tax agency is guilty of “misfeasance in public office” and seek restitution.

“All I want is my life back, I want what they caused me to lose,” he said.

Not just Mr. Leroux’s fate, but the fate of all Canadian taxpayers may be affected by the upcoming case, according to Laurence Armstrong, Mr. Leroux’s Victoria, B.C.-based tax lawyer.

Currently, he says, the CRA does not acknowledge that it has any legal “duty” to taxpayers, and thus cannot be held negligent.
"It will establish whether the CRA has a duty to taxpayers, whose lives they can potentially destroy"
“It will establish whether the CRA has a duty to taxpayers, whose lives they can potentially destroy,” he said.

In the early 1990s, right around the time of Mr. Leroux’s 50th birthday, he purchased a massive plot of property in the shadow of Jasper National Park and developed it into an RV Park (Irvin’s Park and Campground) and an 11-lot subdivision.

An audit came in 1996, during which Mr. Leroux says CRA employees came to his home and, after he had stepped out for an errand, cleared out two filing cabinets’ worth of business and personal documents without permission.

In December, “one of the employees informed him that a significant portion of his documents had been shredded,” reads a 2010 B.C. Supreme Court summary of Mr. Leroux’s plea.  “Other documents necessary for the audit of Mr. Leroux’s affairs had been lost.”
Eighteen years ago, says Irvin Leroux, he was in the midst of a routine audit when CRA employees accidentally sent his tax documents to the shredder. (Getty Images/Thinstock)

Three years later, the CRA stuck the RV park operator with the bill for $640,000 — a figure that quickly neared $1-million due to interest and penalties.

“The numbers are just awful,” said Mr. Armstrong. “He definitely owed a little more tax than he indicated in his returns, but the amount they reassessed him for was just out of this world.”

Years of appeals and tax court battles followed, but the issue finally came to a catastrophic crescendo in 2001, when the CRA filed a Writ of Seizure and Sale against Mr. Leroux’s assets.

Spooked, Mr. Leroux’s creditors immediately called in their loans, and within a matter of months his properties and house had been liquidated at well below market value.
Then, four years later, in a ruling of cruel vindication, a tax court dismissed the six-figure assessment. In fact, said the court, Mr. Leroux was actually owed a $20,000 tax refund.

Ever since, Mr. Leroux has been fighting to right the damages wrought by the tax agency. “They would sooner destroy me and try to bury me than admit they did wrong,” he wrote on his website.

Most egregiously, at the centre of it all are allegations that a CRA employee, in the months before the exorbitant assessment was issued, approached Mr. Leroux with an offer that the “tax problem” could go away if he forked over a bribe of $25,000.

Mr. Leroux’s story went public in 2009 with interviews on CBC Radio and a profile on Global News’ newsmagazine 16×9. “They say there are two certainties in life; death and taxes  — and a British Columbia man says the taxman is killing him,” said anchor Mary Garofalo in an introduction.

In the wake of the media attention, Mr. Leroux started a Facebook account, YouTube channel and even a website,, to “help people so that they don’t have the same thing happen to them that happened to me.”
"They can’t be allowed to turn this into a war of attrition, because Mr. Leroux can’t afford to win a war of attrition"
But he says he soon received so many letters from Canadians in similar straits that it became overwhelming.

“I couldn’t take it, I couldn’t sleep anymore at night; knowing what’s going on in this country,” he said.

The CRA disputes Mr. Leroux’s charges, of course, which is why they brought the matter to trial — and have persistently filed applications and appeals seeking to have the case dismissed.

Mr. Leroux’s camp maintains the tax agency is simply trying to “outlitigate” him.

“They can’t be allowed to turn this into a war of attrition, because Mr. Leroux can’t afford to win a war of attrition,” said Mr. Armstrong.

Indeed, he would have been outlitigated long ago if his fight had not been subsidized in part by the Canadian Constitution Foundation.
Dick Harris in 2006. (Government of  Canada)

“We took on this file because we perceived it as a case where the state was oppressing the individual,” said Karen Selick, the foundation’s litigation director.

In 2006, Mr. Leroux’s plight attracted the attention of B.C. Conservative MP Dick Harris — whose assessment of the situation was a bit more colourful.

“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. Harris wrote in a letter to then-minister of national revenue Carol Skelton, according to a 2009 CBC report.

Nearly two decades of tax battles have left their mark on Mr. Leroux, whose voice still swells with emotion when he discusses the case — and has, over the years, suffered many of the classic symptoms of a man under extreme stress.

Speaking to the Post, he readily compared the Canadian tax collector to a totalitarian regime.

“There are so many people that have been destroyed by this out of control agency, and nobody seems able to hold them accountable,” he said. “They will spend whatever resources they have so I never have to hold them accountable for what they’ve done.”

A veteran in tax litigation, Mr. Armstrong says he is familiar with the power of a CRA dispute to become all-consuming, life-altering events.

“It’s a difficult task to take on the government,” he said.

• Email: | Twitter: @TristinHopper
Tristin Hopper is an award winning reporter working for the National desk of the National Post.

Originally from Victoria, British Columbia the first years of Tristin's journalism career were spent in Whitehorse, where he was a reporter for the Yukon News and later an Associate Editor for Up Here and Up Here Business Magazine.

In between he has made his living as a freelancer, with his writing appearing everywhere from Reader's Digest to the in-flight magazine of a British Columbia helicopter airline.

He is based in Vancouver.


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