{"id":4044,"date":"2019-03-05T09:51:34","date_gmt":"2019-03-05T14:51:34","guid":{"rendered":"http:\/\/www.spiegelsohmer.com\/en\/?p=4044"},"modified":"2019-04-04T10:16:39","modified_gmt":"2019-04-04T14:16:39","slug":"indirect-auditing-methods-not-always-applicable","status":"publish","type":"post","link":"https:\/\/spiegelryan.com\/en\/2019\/03\/05\/indirect-auditing-methods-not-always-applicable\/","title":{"rendered":"Indirect Auditing Methods – Not Always Applicable"},"content":{"rendered":"

In a short decision dated December 5, 2018 in the matter Dion v. Quebec Revenue Agency, 2018 QCCQ 10280, available here<\/a>, the Honourable Daniel Dort\u00e9lus reminds us that although indirect auditing methods are generally acceptable, the actual circumstances of a file must justify their use.<\/p>\n

In this matter:<\/strong><\/p>\n

[34] La contribuable, Mme Dion, a \u00e9t\u00e9 s\u00e9lectionn\u00e9e dans le cadre du projet organisationnel de lutte contre l\u2019\u00e9vasion fiscale pour le projet \u00ab Indices de richesse \u00bb. Les indices de richesse identifi\u00e9s dans son cas sont : Elle est propri\u00e9taire d\u2019un immeuble d\u2019une valeur de 352 400,00 $ et d\u2019un v\u00e9hicule d\u2019une valeur de 30 366,00 $.<\/em><\/p>\n

Armed with this information, the Quebec Revenue Agency audited the taxpayer using the indirect method of cash flow. As a result of this audit, notices of reassessment were issued to the taxpayer for the years 2007, 2008 and 2009.<\/p>\n

However:<\/strong><\/p>\n

[42] Le Tribunal constate que c\u2019est \u00e0 partir d\u2019une hypoth\u00e8se tr\u00e8s mince d\u2019indices de richesse que la v\u00e9rification fiscale a \u00e9t\u00e9 d\u00e9clench\u00e9e dans le cas de Mme Dion, qui avec raison, ne comprend pas pourquoi elle a fait l\u2019objet de soup\u00e7on d\u2019\u00e9vasion fiscale, ni pourquoi l\u2019ARQ a fait preuve d\u2019acharnement \u00e0 son endroit.<\/em><\/p>\n

In fact, at the time it was purchased, the building identified as an indicator of wealth was valued at $235,000 and carried a mortgage of $195,000. In addition, the taxpayer:<\/p>\n

[48] Elle habite chez ses parents qui ne lui charge aucun frais en d\u2019autres termes, elle est \u00ab log\u00e9e nourrie \u00bb, ses repas au restaurant sont pay\u00e9s par son p\u00e8re. Elle prend ses vacances avec ses parents, c\u2019est son p\u00e8re qui effectue les r\u00e9servations et qui d\u00e9fraye le co\u00fbt des forfaits vacance.<\/em><\/p>\n

[49] Elle travaille \u00e0 proximit\u00e9 de sa r\u00e9sidence et elle se rend au travail \u00e0 pied. Ses d\u00e9penses de v\u00e9hicule sont minimes. C\u2019est son p\u00e8re qui acquitte les frais d\u2019assurance pour son v\u00e9hicule.<\/em><\/p>\n

According to the Court:<\/strong><\/p>\n

[52] La preuve r\u00e9v\u00e8le que les pr\u00e9sum\u00e9s indices de richesse, en l\u2019esp\u00e8ce, reposait sur de pure hypoth\u00e8se, de vagues soup\u00e7ons et de simples conjectures qui se sont r\u00e9v\u00e9l\u00e9s erron\u00e9s et inexacts.<\/em><\/p>\n

Therefore:<\/strong><\/p>\n

[55] La m\u00e9thode indirecte des mouvements de tr\u00e9sorerie qui est une m\u00e9thode alternative de cotisation utilis\u00e9e dans le cadre du programme de lutte contre l\u2019\u00e9vasion fiscale, constitue une arme \u00e0 longue port\u00e9e, dont dispose les autorit\u00e9s fiscales pour contrer l\u2019\u00e9vasion fiscale. Elle ne doit pas \u00eatre utilis\u00e9e quand les faits n\u2019y donnent pas ouverture, tel en l\u2019absence de r\u00e9els indices de richesse. On n’utilise pas un canon pour tuer une mouche.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

In a short decision dated December 5, 2018 in the matter Dion v. Quebec Revenue Agency, 2018 QCCQ 10280, available here, the Honourable Daniel Dort\u00e9lus reminds us that although indirect auditing methods are generally acceptable, the actual circumstances of a file must justify their use. In this matter: [34] La contribuable, Mme Dion, a \u00e9t\u00e9 […]<\/p>\n","protected":false},"author":6,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[5,7],"tags":[],"class_list":["post-4044","post","type-post","status-publish","format-standard","hentry","category-litigation","category-taxation-law"],"acf":[],"yoast_head":"\nIndirect Auditing Methods - Not Always Applicable - Spiegel Ryan<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.spiegelsohmer.com\/en\/2019\/03\/05\/indirect-auditing-methods-not-always-applicable\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Indirect Auditing Methods - Not Always Applicable - Spiegel Ryan\" \/>\n<meta property=\"og:description\" content=\"In a short decision dated December 5, 2018 in the matter Dion v. 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