International Journal of Coercion, Abuse, and Manipulation Volume 6 2023 112
seminars conducted in English, after having been
recruited to attend this events by Ferdinand Roy, the
lawyer who had conducted the taxpayers’ business
affairs for the previous 30 years.5
1
That lawyer, a
trusted advisor and representative relied upon by the
taxpayers, had insinuated his clients were paying too
much income tax, then specifically introduced the
taxpayers to Fiscal Arbitrators, saying Fiscal Arbitrators
was a legitimate and legal scheme (Lavoie v The Queen,
2015 TCC 228, paras. 22-34). The signed tax returns
were also in English. In these unusual circumstances,
the Court concluded the taxpayers had a valid reason
to believe the Fiscal Arbitrators pseudolaw scheme had
some reasonable basis. Lavoie v The Queen is one of the
rare instances where gross negligence penalties were
rejected, and understandably so.
A surprisingly small fraction (12.1%, n=8) of Fiscal
Arbitrators customers indicated they had concerns or
suspicions about whether the Strawman tax scheme was
valid. A few (16.7%, n=11) explained the basis for their
belief was direct evidence: they were shown refund
cheques that had been obtained by Fiscal Arbitrators
mechanisms. When it came to Fiscal Arbitrators’
pseudolaw-based tax evasion theories, only 34.5%
(n=19) of Fiscal Arbitrators customers said they paid
any attention to how and why Fiscal Arbitrators claimed
its Strawman business expense scheme operated. Very
few (12.7%, n=7) claimed to understand it.
Some pseudolaw adherents clearly adopt counter-law
schemes on ideological grounds (Netolitzky, 2021),
however no Fiscal Arbitrator customer grounded their
tax avoidance in that way. Instead, in every instance,
Tax Court of Canada justices concluded greed was
the reason why these taxpayers signed up with Fiscal
Arbitrators. Repeatedly, Fiscal Arbitrators Decision
Dataset judgments reach the same conclusion: these
taxpayers were promised money, and they were willfully
blind and simply disinterested in how that result would
be achieved. These taxpayers intentionally ignored the
transparently fictitious business expense claim that
was the basis for the very large, groundless income tax
advantages sought in the tax returns they had signed.
To do so was in law gross negligence. The large majority
of Fiscal Arbitrators taxpayer appeals were rejected
(Table 3), and the additional gross negligence penalties
imposed by the CRA were confirmed.
5 No lawyer with this name is currently registered with the Barreau
du Québec.
IV. Analysis and Discussion
Data acquisition and interpretation for this study was
a generally straight-forward process. Information was
obtained from sources--docket entries and reported
court judgments--that require little to no interpretation.
The variables recorded were not subjective but instead
discrete facts. The source materials for this study
are formal court institutional records and therefore
reliable.
A small fraction (3.6%, n=18) of Fiscal Arbitrators
Docket Dataset Tax Court of Canada proceedings
have yet to be resolved as of December 2022. Docket
records show these matters were frozen--“stayed”-
-pending certain developments. These matters are
now proceeding to hearings. This pattern of pausing
litigation is commonplace in courts, such as the Tax
Court of Canada, where a “lead” or “test” case can
determine an issue or fact pattern that is then applied
in other parallel appeals. That use of precedent cases
happened in Fiscal Arbitrators litigation. For example,
the Wynter v Canada, 2017 FCA 195 Federal Court
of Appeal decision was a “test case” appeal for how to
evaluate potential gross negligence by Fiscal Arbitrators
taxpayers.
There is no obvious reason to anticipate that the small
number of remaining Fiscal Arbitrators Tax Court of
Canada appeals may shift the profile and characteristics
reported in this study.
A. Are the Decision and Docket Datasets
Representative?
Prior to evaluating the results of this investigation,
an important preliminary issue is whether the data
obtained from the Decision and Docket Datasets reflects
the overall Fiscal Arbitrators taxpayer population.
Are these representative samples? The best answer is
“possibly,” and for that reason the quantitative data in
this study should be evaluated with caution.
First, detailed information about Fiscal Arbitrators
taxpayers originated from the Decision Dataset (N=66).
That population represents only a fraction of the
identified Fiscal Arbitrators appeals (Docket Dataset,
N=507). Furthermore, the Docket Dataset taxpayers
are very plausibly a subset of total Fiscal Arbitrators
customers. Some Fiscal Arbitrators customers likely

ISSN: 2710-4028 DOI: doi.org/10.54208/1000/0006 113
never appealed their income tax reassessments.
So, factually, the Decision Dataset is a small
subpopulation who pursued their appeals to a full
appeal trial. That subpopulation is much smaller than
the known number of Fiscal Arbitrators customers who
started appeals, but who then withdrew, abandoned,
or settled their actions pre-hearing (Docket Dataset:
72.2%, n=366), and an uncertain but plausibly
substantial additional population of Fiscal Arbitrators
customers who never sought an appeal. Further
complicating extrapolation based upon the Decision
Dataset population is that the much larger populations
that did not seek or complete appeals may have different
personal characteristics. After all, these groups acted
differently.
Second, both the Decision and Docket Datasets are
potentially incomplete. Searches to identify pseudolaw
litigation are notoriously challenging (Netolitzky, 2017,
pp. 964-965 Netolitzky, 2018a, p. 429). The Docket
Dataset’s instances depend on how the Tax Court of
Canada Registry Clerks categorized and grouped
appeals. The Court’s criteria for a “Fiscal Arbitrators”
appeal designation are unknown. What can be said with
high confidence is that the Tax Court of Canada and its
staff would, at a minimum, be highly familiar with this
type of appeal, given their volume, and unusual and
specific characteristics.
A further potential complication is that only about
half of the Tax and Federal Courts’ rulings on Fiscal
Arbitrators appeals (the Decision Dataset: N=66)
were written up as reported decisions. The additional
“unreported” concluded appeals captured in the
Docket Dataset (n=67) may have other characteristics.
The attributes of decisions that are reported are
potentially different from those where a judge chose
to give an oral decision (Netolitzky, 2018a, pp. 429-
430). Two factors that mitigate against that concern are
that: 1) the frequency of post-hearing outcomes in the
Decision and Docket Datasets is quite similar, and not
statistically different (x2(2, N=186)=2.117, p=0.3469),
and 2) the appeal filing date profiles of the Datasets are
very similar (Figure 2).
Overall, the information obtained in this study should
be approached with care, particularly in extrapolating
characteristics between Fiscal Arbitrators litigants
who pursued complete appeal proceedings, and those
who either never took that step, or who aborted their
appeals. That said, some of the broad conclusions
from data obtained via the Decision Dataset are likely
relevant to the Fiscal Arbitrators customers population
as a whole, simply because the same characteristics
were repeatedly and consistently identified. Ultimately,
these taxpayers were a self-selecting population, at all
levels.
B. Fiscal Arbitrators Taxpayer Population
Characteristics
The Decision Dataset provides much information about
those Fiscal Arbitrators customers who completed Tax
Court of Canada appeals. Table 1 illustrates the Fiscal
Arbitrators clientele was diverse, ranging from blue
collar and factory workers, to professionals, to business
owners and managers. This scheme was not apparently
restricted to certain social or economic classes, or
work communities. That diversity is also reflected in
the educational backgrounds reported in Table 2. The
Fiscal Arbitrators customer base was not uneducated.
61.7% (N=47) of these taxpayers reported post-high
school education.
Combined, no evidence supports Fiscal Arbitrators was
marketed to and adopted by a comparatively limited
education, economically disadvantaged population.
Fiscal Arbitrators did not target a vulnerable customer
pool. Instead, the available data suggests the opposite.
Tables 1 and 2 indicate these taxpayers had the capacity
to know better, and were not naïve or vulnerable. That
was what the Tax Court of Canada justices repeatedly
concluded when the Court confirmed gross negligence
penalties. The one countervailing factor is how few
(15.2%, N=46) Decision Dataset Fiscal Arbitrators
customers reported that their usual practice was to
prepare their own tax returns, so, arguably, most of
these taxpayers were not familiar--in a functional
sense--with standard Canadian income tax return
paperwork.
When the Decision Dataset taxpayers’ explanations
are reduced to their core, most of these taxpayers
reported blind obedience and trust in persons who
had promised large financial advantages--fast and easy
money. Just one third (34.5%, n=19) of these taxpayers
claimed they paid any attention to how those results