Salmon Arm couple loses appeal in 'unsophisticated' effort not to pay income taxes

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September 06, 2019 - 7:00 AM

SALMON ARM - A Shuswap woman who declared herself financially to be a "trust" with "non-resident" status, although she lived in Salmon Arm, has lost an appeal to overturn convictions for tax evasion in what a judge called "an unsophisticated and intellectually dishonest effort to avoid paying income taxes."

In a Salmon Arm court ruling, Aug. 30 Justice Sheri Ann Donegan told Paola Virginia Steeves her appeal consisted of "spurious, unfounded allegations" that could not suggest her original trial was unfair "let alone" establish a miscarriage of justice.

According to court documents Paola Virginia Steeves was convicted in August 2018 of seven counts related to failing to file tax returns between 2012 and 2015 and was fined $7,000.

The documents do not say whether Paola owned any tax or not, but centres around the James and Paola Steeves’ Family Trust of which Paola is a trustee.

According to court documents in May 2017 the Canada Revenue Agency served Paola notices requiring her to file individual tax returns as well as returns for the James and Paola Steeves’ Family Trust. Paola didn't file the returns and was charged in December 2017 for failing to do so.

During the original trial held in May and July 2018, Paola's husband James Steeves, attempted to represent himself as his wife's attorney, although he was not a lawyer. The judge refused, but court documents say James did speak at length throughout the trial, and he was allowed to remain in the body of the courtroom as long as he was not "disruptive."

During the original trial, James outlined how he had set up his family's financial affairs in the form of the James and Paola Steeves’ Family Trust, and how the family trust was structured as a "non-resident" although they remained "domiciliary" in Canada. James testified because they were non-residents they were exempt and under no obligation to file tax returns.

The judge disagreed and said the steps Paulo and James had taken were "consistent with maintaining the fiction that they started in 2011" and was "no more than an unsophisticated and intellectually dishonest effort to avoid paying income taxes."

Paulo appealed the conviction in August 2018, stating in her notice of appeal that the judge failed to "understand any of the Canada Revenue Agency filings which were the main parts of my evidence."

Paulo also appealed saying the judge did not allow her husband to represent her even though he's not a lawyer, that she was denied a trial by jury, and a miscarriage of justice took place, along with other points.

Justice Donegan in her decision responds to some of the allegations with, "again, the answer here is simply, no."

Justice Donegan says Paulo "was not able to organize or synthesize" her arguments as to whether a miscarriage of justice took place.

"I think she argues that her trial was not only unfair... but that a number of things happened in the trial... which were so serious that they undermine public confidence in the administration of justice," the judge said in the decision.

Court documents say James' made complaints against the original judge as well as making "serious allegations against a witness, Crown counsel and even the transcription services."

James testifies Crown counsel purposely "twisted and misconstrued" his wife's evidence to confuse her. In another allegation, he says testimony from a Canada Revenue Agency was "nothing but lies with a fiendish plot to label the trust and Paola as possible criminals."

He also states that transcripts have parts “missing, removed from the record”.

Justice Donegan says the allegations are "spurious, unfounded" and "completely unsupported" and dismisses the appeal.

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