International Journal of Coercion, Abuse, and Manipulation (IJCAM) 

Vo. 6, (2023).  Published April 16, 2023. 

DOI: 10.54208/1000/0006/005

PDF of Article   | PDF of Issue (in development)

A Ride With My Best Friend: The Fiscal Arbitrators Pseudolaw Tax Evasion Scheme, Recruitment, and Litigation

Donald J. Netolitzky, PhD, K.C. 

Abstract

Fiscal Arbitrators was a comparative short-lived Canadian pseudolaw tax avoidance

scheme that operated between 2006-2012. Taxpayers made “Strawman Theory” claims

to create large but fictitious business expenses. Taxpayers who employed Fiscal

Arbitrators techniques had no legal basis for their claims. The Canada Revenue Agency

assessed “gross negligence” penalties in addition to other automatic charges. At least

500 Fiscal Arbitrators customers appealed their taxation re-assessments at the Tax Court

of Canada. There, these taxpayers usually claimed their actions, and blatantly false tax

returns, had a reasonable basis.

This unusual confluence of factors resulted in a substantial number of written court

decisions that include first-hand, first-person, accounts of how and why Fiscal

Arbitrators’ customers were recruited, and that describe this “Detax” scheme’s

operation. Unexpectedly, Fiscal Arbitrators customers were primarily recruited via

person-to-person contacts and through family, social, and workplace networks. No

Internet-based recruitment was reported. Fiscal Arbitrators customers showed little to no

interest in or understanding of the basis for their extraordinary claims. Their sole

motivation was greed. These taxpayers were mainly non-ideological “mercenaries” who

abandoned pseudolaw to conduct damage control steps as rational self-interested actors.

Most voluntarily terminated their appeals prior to a full appeal court hearing.

The characteristics of this study’s Fiscal Arbitrators population do not correspond with

how legal, media, and academic sources stereotypically portray and describe pseudolaw

adherents. This investigation thus illustrates pseudolaw’s users are potentially more

diverse than is commonly recognized.