International Journal of Coercion, Abuse, and Manipulation (IJCAM)
Vo. 6, (2023). Published April 16, 2023.
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.
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.