Anti-tax crusading B.C. couple loses Tax Court battle with CRA

A federal tax court judge has dismissed a bid to avoid paying income tax and GST by a B.C. couple who made more than $1.4 million counselling Canadians on the evils of taxation.

According to a decision posted last week, Russell Porisky and Elaine Gould travelled the country distributing books and videos, running seminars and training "educators" who taught as many as 800 students the merits of an "illogical and unreasonable" method of tax avoidance.

Porisky told Tax Court Justice Susan Wong that "in his view, income tax was actually a labour tax resulting in a form of slavery which in turn was a crime against humanity."

Not surprisingly, Wong took a different view — dismissing the couple's appeals of assessments dating back 20 years and finding the Paradigm Education Group, which Porisky viewed as a "passion-driven duty," was, in fact, a business subject to the goods and services tax.

Wong's decision marks the latest chapter in a battle between the Canada Revenue Agency and a couple whose theories have proven the bane of the tax collector's existence — not to mention the downfall of many of their followers.

Both Porisky and Gould have been jailed for their activities; Porisky got five-and-a-half years in 2016 for counselling fraud, and Gould was handed six months for tax evasion.

More than two dozen Paradigm educators and students across the country have also been prosecuted in criminal courts, resulting in both jail time and substantial fines.

The ruling provides a window into the growth of an enterprise that took over the lives of Porisky, Gould and the seven children that made up their blended family.

The B.C. Supreme Court judge who sentenced Porisky in 2016 said his scheme was "hard to describe" — the problem being that trying to set out "the Paradigm theory in a logical manner is impossible and inadvertently lends credence to it."

"Generally, Mr. Porisky and his Paradigm theory was based on the concept that, as natural persons as opposed to artificial persons, no tax on income was payable," wrote Justice Miriam Gropper.

"As a natural person, Mr. Porisky, Ms. Gould, his educators and students could arrange their affairs by using contracts for hire, confidentiality clauses, amendments to the signature box on tax returns, disclaimers, and withdrawing from government benefit plans by using forms that Mr. Porisky and Paradigm prepared and provided to them."

Porisky — who now works as a handyman — said he started Paradigm because he felt "it was his duty" to share what he believed he had learned through extensive reading of Canada's Income Tax Act and Excise Tax Act, and "people wanted to hear what he had to say."

He said he would work on Paradigm in the back room of a house where three of his children were being home-schooled. Gould said that by 2004, she attended most out-of-town seminars and "sometimes took their children, who sat with her at the welcome table."

"In addition to greeting people at the door, she sometimes made the video recording for future DVD distribution, although that task was more regularly done by the educators," Wong wrote.