News release

Court rules against tax protester

Ottawa, September 11, 2000... An Ottawa Superior Court judge has ruled that retired Ottawa school teacher Thomas Kennedy is not exempt from Canada's Income Tax Act.

Kennedy, represented in court by David Lindsay of Calgary, asked the court to recognize his claim to be exempt from tax and to order the Ottawa-Carleton District School Board to return money that has been deducted from his pay. Mr. Justice G. Gordon Sedgwick dismissed his request, ordered him to pay $500 legal costs to the Canada Customs and Revenue Agency, (CCRA) and ordered that the school board remit any money withheld, as required by law.

Kennedy argued unsuccessfully that the Income Tax Act applies only to corporations and not to natural persons, that income tax is voluntary, and that the form requiring the Ottawa-Carleton District School Board to withhold amounts to cover tax is not valid.

The arguments rejected by the court were essentially the same as claims made by anti-tax campaigners who say they know of lawful ways for individuals to exempt themselves from income tax.

On the argument that the definition of "person" in the Income Tax Act does not include individual persons, the judge said "I find that a "person" as defined in s. 248(l) of the Income Tax Act includes both a natural person and an artificial person. It follows that the applicant is a "person" and a "taxpayer". His obligations include the filing of annual income tax returns and the payment of any income tax owing under his returns."

To the argument that all taxes are voluntary and the government cannot enforce tax laws, the judge said, "In my view, there is no support in "the common law, aka the rule of law" for the extremely broad proposition that all taxes are voluntary."

To arguments about the form used by the CCRA to require employers to deduct amounts from pay, the judge said "I have considered his objections and find no merit in them. I find that the Requirement to Pay (is) valid and enforceable against the applicant."

The full text of the ruling can be found in Ontario Superior Court of Justice File 00-CV-14232.

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