Two recent cases address unsuccessful attempts to avoid tax by dubious means.
Brisson v R, 2013 TCC 235, has an interesting discussion on gross negligence penalties that were applied to a taxpayer who participated in a scheme that created non-capital losses out of thin air. The taxpayer’s return for a year reported large “business” losses and attempted to carry back non-capital losses to generate refunds for prior years. The CRA denied the losses, did not refund any amount to the taxpayer (probably luckily for him) and imposed gross negligence penalties. The taxpayer tried to avoid the penalties by appealing to the Tax Court and in effect claiming naïveté. The Court dismissed his appeal, and, after noting his experience in business and tax matters (he prepared his own returns for years before participating in the scheme), wrote as follows:
 Mr. Brisson stated that he did not read his 2008 income tax return prior to signing it. According to his own exhibit, Mr. Brisson was instructed to review his return carefully and I have concluded that he did read his return. If Mr. Brisson truly did not know that he was participating in a scam on the tax system, then he was wilfully blind. He was willing to sign his income tax return and join in the deception in exchange for a refund of all the taxes he had paid in 2005, 2006, 2007 and 2008.
Sinclair-McDonald v R, 2013 ONSC 4900, seems to be a response to some variation on the “detax” theme. The verdict: the taxpayer’s statement of claim disclosed no reasonable cause of action and the action was dismissed.