Court Dismisses Appeal of B.C. Bountiful Leader, Fines $150,000

This article was last updated on April 16, 2022

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A federal tax court judge has rejected appeals of tax assessments by the leader in the polygamous enclave of Bountiful, B.C., Winston Blackmore, deciding that the community is not eligible for the requirements of a congregation set out in the Income Tax Act.

In the decision announced on August 21, Justice Diane Campbell stated that Mr. Blackmore and Bountiful are not eligible for provisions in the act that were intended to include communal organizations such as Hutterite colonies. Judge Campbell disallowed tax appeals for six taxation years between 2000 and 2006, exclusive of 2005, which found that Mr. Blackmore had understated his income by $1.8-million. Hence, the judge also announced “gross negligence” penalties of nearly $150,000 in relation to four of the taxation years. She stated that “the Appellant ought to have known that ignoring the astronomical magnitude of the differences between the reported income/benefits and the amount of benefits assessed, ranging from 884 per cent to 1,326 per cent, over a number of years, would attract some type of tax consequences.”

In her decision, Judge Campbell wrote that “this is the type of ‘cavalier attitude’ discussed in DeCosta. It is behaviour reflective of an indifference as to whether there is or is not compliance with the law. The Appellant headed a community and a company that had business activities in a number of locations in British Columbia, Alberta and the United States. However, even if he had no such business experience and background, I would still conclude that, due to the staggering amounts of unreported income and benefits, he was grossly negligent in ignoring these amounts over a number of years. Therefore, I must conclude that the Appellant’s actions exceed simple carelessness and that he willfully misrepresented the true state of the Company’s activities so that gross negligence penalties are justified.”