Recently two former Paradigm Education Group students (private property advocates), Bob and Terry Steinkey, avoid jail by using Apu’s Theory on how Canada’s income tax really works. They used Apu’s Theory for pointing out Canada’s laws protects private property rights; their contracts stated their income’s status is their private property and not Canada’s public money; and they declined all benefits paid from public money. This is the first time someone with tax offenses used Apu’s Theory to avoid jail1. It also fits with CRA admitting in this November 2015 press release that Paradigm taught tax avoidance and not tax evasion.
Russ Porisky started Paradigm Education Group, (“PEG”) around 2001. Porisky and PEG Educators taught human rights2. One human right is keeping all your income if it is your private property. (In contrast, receiving income as “public money” usually triggers income tax owing.) PEG had a Contract for Hire (“CFH”) which stated income received under it is private property and not Canada’s “public money” belonging to the Canada Pension Plan / Income Tax Act “office”. In other words, the Steinkeys do not wish to convert private property income belonging to them into Financial Administration Act (“FAA”) “public money” belonging to Canada through such an “office”.
Apu’s Theory concludes that Canada’s tax laws deems (a legal fact until rebutted) your income is Canada’s “public money”. PEG’s Contract for Hire rebuts that deeming. The Paradigm CFH clarifies the income’s status.
Search warrants were executed across Canada on August 25, 2010 on twelve Paradigm Education Group Educators. CRA’s basis was PEG materials show Porisky filing “0” on his T1 returns. Apu’s Theory concludes a T1 form is for reporting only Canada’s “public money” and not for reporting private property income. Therefore, such a filing is an incomplete reporting of “income” and so is a tax offence. However, there is no legal definition of the “social insurance number” that CRA uses on their T1 form. CRA does not have a form for reporting private property income. There is also no definition in Canada’s Income Tax Act (“ITA”) of “income” for individuals. The ITA is so obfuscated that few understand it. Finally, CRA is unaware3 of how the ITA really works4. This is entrapment!
Porisky’s first trial shows the Crown’s prosecution strategy. Crown’s main evidence is a T1 return. If the individual taxpayer did not file one, CRA calculates one for the accused (gosh, aren’t they helpful?) CRA then enters it into court and proposes it as evidence. In Porisky’s case, CRA Investigator Tony Brunke 5 proposed deductions via a spreadsheet (at paragraph 28). Porisky accepted the income’s status, deductions, and benefits proposed by CRA’s amended T1 (at paragraph 29). Porisky arguably was entrapped and so unwittingly converted6 his former private property income into Canada’s “public money”. He then also owed income tax for using privileges (such as tax deductions) associated with that office7.
CRA claims they have so far convicted 34 former PEG private property advocates. Most have served or are serving jail time. Apu’s Theory can explain why all these convictions are correct court decisions since in every case (except for this one so far) the accuseds accepted benefits and income status on T1s proposed by CRA. We already studied the Michael Millar case and the Keith Lawson case . Both were former PEG Educators. We argued how CRA received these convictions through entrapment since neither professional accountants, tax lawyers, CRA, nor most judges seem to understand that accepting income calculated on a T1 converts former private property into Canada’s “public money”. Nor do they seem to understand how the income’s status drastically affects the amount of income tax owing.
Bob and Terry Steinkey were PEG private property advocates. Using Apu’s Theory, they pointed out their PEG Contract for Hire stated their income is their private property and is not Canada’s “public money”. Since they chose (while under their CFH) to not to hold the CPP / ITA “office” that uses Canada’s “public money”, they arguably owed no “office” fee (income tax) for work done under their CFH. Following Apu’s Theory, they arguably could not report their private property income on CRA’s T1 form, but only Canada’s “public money” they received for certain other tasks (which they reported). Nonetheless, they were charged with making false or deceptive statments on their returns!
Apu’s Theory gave Bob and Terry Steinkey the confidence that they did nothing illegal. That is probably why the judge overruled the Crown and accepted their guilty pleas to something they never did8 (false or deceptive statements in a return) in exchange for avoiding jail (since they never broke the law).
That is why CRA’s press release on the Steinkeys refers to “conditional jail sentences”. CRA makes it sound as bad as possible, but it is just house arrest. This CBC news article merely regurgitates CRA’s propaganda, er, press release. There was no investigate journalism. (And the press wonders why people are seeking alternative news sources). Even this well-respected tax law firm did not bother to check what really happened and also just regurgitated CRA’s propaganda.
Apu’s Theory enables two former PEG private property advocates to avoid jail. The judge would not have overriden Crown and ordered no jail time unless Apu’s Theory arguably is close to the truth in explaining how Canada’s income tax system really works. Perhaps the copies of Apu’s Theory sent by registered mail to over forty CRA officers means the system cannot ignore it anymore? Is that why CRA admits in this press release that Paradigm Education Group taught Canadians tax avoidance and not tax evasion?
We will do a more in-depth analysis in the following weeks of what really happened versus what CRA claims happened.
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