Income Tax Statements and Inadmissibility

On December 8, 2010, the Federal Court released its decision in Masych v. Canada (Citizenship and Immigration), 2010 FC 1253 (“Masych“)  The case involved an individual whose temporary work permit application was denied because she did not produce income tax statements from 2002-2006 after an immigration officer (the “Officer”) requested that she do so.  The reason that the Officer wanted copies of her tax statements was not to confirm her employment history for determining whether or not she was qualified for the job that she was applying for, but rather to determine whether or not she was inadmissible for having ever committed tax evasion.

The applicant had never been convicted of a criminal offense.  No evidence was ever presented that she had been charged with a criminal offense.  Finally, it is important to note that the applicant lived in the United Kingdom from 2002-2006, a country with a legal system similar to Canada’s.

The applicant did not produce the income tax statements as requested, and her application was rejected on the grounds that the Officer was unable to determine whether or not she was inadmissible to Canada for having committed an offense abroad that would constitute an indictable offense in Canada (tax evasion). The Federal Court upheld the Officer’s decision.  The Court noted that the Officer had a duty to be satisfied that the applicant was not inadmissible, and that tax evasion could result in an applicant being inadmissible.

A reading of the case suggests that the only argument that the applicant’s counsel made was that the applicant had provided a statement stating that she only worked part time, confirmed by the employer, and that this should have satisfied the visa officer.  The Federal Court quickly punted this decision aside noting that such a response did nothing to alleviate the officer’s concern.  As this appears to have been the only argument raised, the Federal Court did not discuss the issue of whether the immigration officer was correct in asking for tax statements in any great detail.

Does requiring income tax statements for the purpose of determining tax evasion make sense?  Should the immigration officer have gone on a fishing expedition to determine if the applicant had committed any offenses abroad?  Is this a proper application of the inadmissibility provisions of the Immigration and Refugee Protection Act?

The Citizenship and Immigration Canada Manual states that as part of Canada’s international commitment to combat transnational crime, the policy intent in applying the “committing an offense” provisions is first and foremost to deny entry into Canada and thereby prevent Canadian territory from being used as a safe haven by persons who are subject to criminal proceedings in a foreign jurisdiction, or who are fleeing from such proceedings.

In Masych, there was no evidence that the applicant was fleeing prosecution. Indeed, there was no evidence that she had ever been suspected of income tax evasion prior to the visa officer raising this concern.  As such, was it appropriate for the visa officer to go on what essentially amounts to a fishing expedition?

The Manual further notes that in order to determine on reasonable grounds that an act was committed, it must be established, amongst other things, that an act was committed.  This can be established through credible information or intelligence that a person had committed an offense.   In Masych, there was simply no evidence that the applicant had committed income tax evasion.

Even if the applicant had provided income tax statements, this in of itself does not show compliance with UK income tax law.  Unless the visa officer also happens to be an expert on foreign tax law, it is impossible for the officer to know whether an applicant paid the appropriate amount of tax, and if not, whether the failure to do so was deliberate.  Accordingly, asking for income tax statements does not resolve this issue in any meaningful way.

Unfortunately, it does not appear that any of these issues were discussed in the case.  If requesting income tax statements for the purpose of determining inadmissibility becomes routine, I imagine that it will in the future.


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