Tax Protesters - Questions and Answers

Q1.  What is a tax protester?

A1. Tax protesters are individuals who support the false notion that they do not have to pay tax on the income they earn, by using a combination of legal and other arguments to place themselves outside of the tax system.

One of the most common arguments tax protesters use is the natural/legal person argument.

Q2. What is a natural person and what is a legal person?

A2.  Tax protesters treat themselves as two people for income tax purposes. They define the natural person as the individual that performs the labour required to earn income, and the legal person as the legal entity that the federal government creates through the issuing of a social insurance number (SIN). Tax protesters allege that the legal person has to file an income tax and benefit return, and that income received as a natural person is not subject to Canadian income tax.

Canadian courts have consistently rejected the natural-person arguments often used by tax protesters in order to avoid paying taxes.

Q3.  Who is involved in the tax protester movement?

A3.  People from all demographics are involved in the tax protester movement.

Q4. What are some of the common false arguments of tax protesters?

A4. Tax protesters make the following false arguments.

  • They cannot be taxed. They support this claim by stating that :
    • The Income Tax Act is valid, but it does not apply to natural persons.
    • The Act only applies to a legal representative of the legal person that is created through a SIN.
    • They do not define themselves as persons under the Income Tax Act.
    • There is no intent (mens rea), because they believe (despite a number of cases to the contrary) that they are not subject to tax.
  • Income tax is not legal. They support this argument by stating that income tax was deemed illegal in the constitution (Magna Carta) and the British North America Act when applied to natural persons.
  • They can challenge their obligation to pay taxes under the law through the Charter of Rights and Freedoms. They support this argument by stating that: :
    • They do not want to pay taxes because the money is used to make weaponry, which is against the Human Rights Convention.
    • Anyone trying to enforce tax laws is violating the rights of taxpayers.

Q5.  What is the CRA doing to fight the tax protester movement?

A5. The CRA is always on the lookout for tax schemes, such as the tax protester movement. It will reassess the income tax and benefit returns of the individuals involved in such schemes. In some cases the CRA will act to have individuals prosecuted for tax evasion. The CRA targets and deals with the people who promote tax schemes.