B.C. Couple’s Anti-Tax School Appeal Rejected by Federal Court
A British Columbia couple who ran seminars claiming people could legally avoid paying taxes have had their appeal against hefty tax bills dismissed by the Federal Court of Appeal. Russell Porisky and Elaine Gould had attempted to challenge tax assessments on $1.4 million in revenue generated between 2004 and 2008, but the court ruled this week that their appeal “had no merit,” upholding last year’s decision by the Tax Court of Canada.
Porisky and Gould had been convicted of tax evasion in 2016 after operating educational seminars through their Paradigm Education Group. These seminars promoted the idea that paying taxes was unnecessary, even equating taxation to a form of slavery. Over five years, the couple reportedly sold tickets, published books, and created training materials that brought in $1.4 million in revenue, yet they reported no income and paid no taxes.
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In their appeal, Porisky argued that their activities were personal endeavors with no intention of earning a profit, and therefore not subject to taxation. The court, however, has consistently rejected such arguments, emphasizing that income generated from activities like theirs is taxable, regardless of claimed intent. Judge Susan Wong noted that Porisky’s belief in a distinction between “natural versus artificial persons” and his view that income tax amounted to a labor tax equivalent to slavery were not legally valid defenses. Porisky had been sentenced to five and a half years in prison and fined over $239,000, while Gould received a six-month prison term and a $38,000 fine.
The case highlights the ongoing efforts by the Canada Revenue Agency to crack down on tax protest schemes. Other individuals connected to the Paradigm Education Group have also faced charges, convictions, and fines. For example, Eric Ho of Richmond, B.C., was sentenced to 30 months in prison and fined more than $122,000 for tax evasion, while West Vancouver dentist Dr. Peter Balough received an 18-month conditional sentence and a $578,000 fine.
The Federal Court of Appeal’s ruling firmly reinforces that schemes promoting the avoidance of taxes through pseudolegal arguments will not succeed in court. Porisky and Gould did not have legal representation during their appeal, and the ruling effectively closes the chapter on their challenge years after their initial convictions. The Canada Revenue Agency continues to characterize such individuals as tax protesters who falsely claim they are exempt from paying income taxes.
This case serves as a clear reminder that attempts to sidestep taxation using elaborate theories or personal interpretations of the law will almost certainly fail and can lead to serious legal and financial consequences.
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