B.C. tax evasion counsellor found guilty

Yet another B.C. advocate of the natural person theory of tax evasion faces possible jail time for teaching hundreds of Canadians a fraudulent scheme for dodging the taxman.

North Vancouver’s Michael Spencer Millar is set to be sentenced this month after a B.C. Supreme Court judge found him guilty of filing false income tax returns, evading income taxes, failing to pay GST and counselling fraud.

Millar was an educator for the Paradigm Education Group, an outfit that told students they aren’t required to pay income taxes if they declared themselves natural persons. He and his colleagues falsely suggested that only artificial persons who agreed to be taxpayers have any responsibilities under the Income Tax Act.

“The primary flaw in this argument is that the ITA does not make a distinction between artificial persons and natural persons,” Justice Victoria Gray wrote in an understated Oct. 11 judgment.

“The reference (in the act) to ‘every person resident in Canada at any time in the year’ is not limited in any way.”

Investigators found evidence that Millar advised 238 students on how to use the scheme, charging each of them a percentage of their earnings. A chart seized from his home suggested that someone earning $30,000 annually would lose $12,761 to taxes in two years, making the $4,200 fee to Paradigm look like a relative bargain.

One former student testified that she asked Millar what would happen if the scheme “fell apart,” and he told her that tax evasion charges had failed in court against other natural persons.

On each of his tax returns for 2004-06, Millar reported just one cent in income. But an analysis of his bank records suggests he grossed about $185,500 from Paradigm students in those three years, and prosecutors estimated he should have paid about $10,400 in federal taxes. He didn’t file any returns over the next two years, when another $1,800 would have been owing.

He also owes about $12,000 in GST for Paradigm business between 2005 and 2008, according to Crown estimates.

Subscribers to the natural person theory often use arcane legal jargon to justify their tax evasion, invoking everything from the Magna Carta to the Queen’s coronation oath. They occasionally add superfluous punctuation marks like colons and hyphens to their names to assert their natural person status.

During his trial, Millar attempted to argue his way out of the charges by claiming Canadian law has no jurisdiction in British Columbia. He also suggested the use of capital letters in his name had some significance to his case — i.e., that going by Millar rather than MILLAR would make him a natural person.

That claim, the judge pointed out, was based on Roman law from the first century. She went on: “The Roman law of almost 2,000 years ago is of historical interest only. Roman law is not even the historic basis of our law.”

Millar is one of at least eight educators and 26 students of the Paradigm scheme who have been convicted in Canadian courts in recent years.

Last week, another key player in the group was sent to jail. Keith David Lawson received a sentence of 18 months on convictions for income tax and GST evasion, and counselling to commit fraud. The group’s founder, Russell Porisky, was sentenced this summer to five and a half years in prison.