Following a trial last fall, both sides in a case of alleged tax evasion made their arguments on Monday.
The federal Crown alleges that Jerry McCaw evaded paying $114,924 in taxes between 2004 and 2008. He was charged as both an individual and as the director of the corporation Jake's Oilfield Construction. When McCaw changed his status from employee to subcontractor he allegedly evaded $99,607 in federal income tax.
There is a difference between the personal and corporate amounts, the Crown noted, because in 2007 McCaw demonstrated a loss and claimed no income for that year. He was then allowed to apply the loss to his 2004 and 2005 income tax returns and obtain a refund for taxes paid in those years, but that money only applies to his personal amount.
McCaw began the afternoon proceedings in Estevan provincial court with a message presiding Judge Karl Bazin didn't fully understand. When he asked McCaw to clarify, the accused requested he bring someone into the court with authority who understands him. Bazin warned McCaw about citing him with contempt if he continued.
After a brief adjournment, the Crown carried on with its argument.
In 2004 and 2005, McCaw filed T-1 forms showing regular employment income with Jake's Oilfield Construction. In 2006, the T-1 he filed showed he received only $20,000 of income from Jake's Oilfield, which was significantly less than in previous years, said the Crown. That only included the months from January to March. In 2007, his T-1 showed an $84,000 loss and no income. That loss he carried back to obtain refunds in 2004 and 2005, while in 2008, he filed a T-1 return showing an income of one dollar.
The returns were filed from H&R Block, and the Crown noted the accountants filed those tax forms under the specific direction of McCaw.
The Crown said one accountant testified, "he would have advised McCaw that the amount he received from the corporation was income to him and therefore should have been claimed on the return."
The Crown said further that McCaw gave instructions to other accountants on how to file his papers.
"(One woman) testified that she specifically asked McCaw if he was claiming amounts as income on his T-1 return, and he indicated he did not have to," said the Crown.
The Crown said McCaw was receiving income from 2004 to 2008 and took steps to hide it. For the 2006 taxation year, evidence showed that McCaw received $284,484 in income. The Crown noted that since the McCaw was charged, he has filed a notice of assessment and is seeking further refunds from the CRA.
In 2006, McCaw received $100,000 in the form of a credit in a shareholder loan account, added the Crown. On April 2, 2007 he cashed a cheque and deposited that money.
He received $139, 410 in 2007 and in 2008, he received $124,150 in income, said the Crown.
The position McCaw has taken in his defence has been ruled against many times by courts across the country, added the Crown. She pointed to one case that sums up the court's position of the natural-person theory that McCaw espouses.
"Not only does it not bear any legal logic, but it also fails to accord with common sense. It is a failed attempt at word magic and has no validity," the Crown said.
McCaw said he agreed with natural person findings and that his name is just a title and is not a man. McCaw added that he wished to see the contracts between himself and the CRA worker, along with contracts between himself and the head of the CRA, and the CRA worker and the owner of the CRA. Bazin told him no contracts were filed into evidence and probably don't exist.
"If they don't exist then he has no right to be an informant and bring it up in court," said McCaw regarding any testimony the CRA worker may have provided during the trial.
McCaw added if the contracts don't exist, or can't be presented in court, he would ask for a dismissal of the charges against him.
Bazin took that into consideration and reserved his decision until April 22.
