Retired teacher fails attempt to escape reach of Income Tax Act

The Act applies to corporations, argued Kennedy, but individual compliance is voluntary.

Kennedy asked the court to recognize his claim to be exempt from income tax and to order the Ottawa-Carleton District School Board to return money that has been deducted from his pay. Justice G. Sedgwick dismissed his request, ordered him to pay $500 in legal costs to the Canada Customs and Revenue Agency, and ordered that the school board remit any money withheld, as required by law.

Kennedy’s arguments echoed claims made by anti-tax campaigners that individuals can be exempted from application of the Income Tax Act. The definition of “person” in the Income Tax Act does not include individual persons.

The judge ruled that “person” as defined in s. 248(l) of the Income Tax Act includes both corporations and natural persons. In response to the argument that all taxes are voluntary and the government cannot enforce tax laws, the judge said, “In my view, there is no support in “the common law, a.k.a. the Rule of Law” for the extremely broad proposition that all taxes are voluntary.”