Federal taxman gets caught with pants down in battle against ex-stripper

MONTREAL — In a legal showdown against a tax-wary former stripper, it’s the Canada Revenue Agency that’s been caught with its pants down.

=MONTREAL — In a legal showdown against a tax-wary former stripper, it’s the Canada Revenue Agency that’s been caught with its pants down.

The legal saga over $2 million in undeclared revenue began in storybook fashion at Chez Paree — a pricey Montreal strip club patronized over the years by scores of wealthy executives and visiting athletes, including some very prominent hockey Hall of Famers.

Martine Landry was a dancer at the Montreal institution and was particularly popular with one rich, elderly customer who struck up a relationship with her.

He showered her with gifts over the years worth about $2 million: a Corvette, money to buy a BMW, eight fur coats, jewels, a vacation, cash to buy a big downtown bar and get out of the dancing business, and $168,000 in $1,000 bills for a down payment on a house.

According to a judgment rendered by the Tax Court of Canada, the mystery benefactor, named in court documents as Mr. X, paid Landry largely to keep him company, not to dance.

Landry in turn recounted that she was attracted to his vast knowledge of all things and, over time, the publishing-industry magnate, now 80, began to introduce her to a world she knew nothing of.

Landry would often accompany her benefactor to the Montreal casino, where he would give her the winnings to deposit in her account.

But eventually her low income statements and sky-high living expenses raised alarm bells at the federal revenue agency.

By this time, Landry had long quit dancing and was the owner of the popular Montreal watering hole Mr. X had helped her acquire.

A net-worth audit showed a major discrepancy between revenues evaluated against assets and outgoing expenses, the difference being subject to taxes unless she could prove where the money came from.

And like many Canadians, Landry had a difference of opinion with the federal taxman about how much money she actually owed.

The feds demanded $602,617 in taxes and penalties for the years 1998 to 2002.

But the Tax Court of Canada sided with Landry in a recent judgment. Judge Robert Hogan ruled the gifts could not be taxed.

In Canada, gifts, inheritances, and windfall gains from lotteries or other gambling are not considered taxable.

But tax experts say it’s very common for people who frequently receive gifts — exotic dancers being a notable example — to be caught in such a legal quagmire.

Hogan ruled that a more thorough investigation by the CRA would have provided the answers they sought without having to drag the matter to court.

But the story’s not over. Revenue Quebec still wants $643,000 in taxes and penalties and that case is playing out in a Quebec court. Ouellette hopes the favourable decision will help in the Quebec case.

There’s one final order of business in this affair: Landry is now considering a lawsuit against the Canada Revenue Agency.

Just Posted

Number of seniors who play bridge in Red Deer growing

Red Deer Bridge Club has been around for close to 60 years

PHOTOS: Buccaneers battle Wolfpack in AFL semifinal

The Central Alberta Buccaneers battled the Calgary Wolfpack in the Alberta Football… Continue reading

Raising awareness for Bikers Against Child Abuse

Second annual Raise A Ruckus Against Child Abuse was held at the Red Deer Radisson Hotel Saturday

Central Alberta Yogathon cancelled Saturday

Due to air quality concerns the fourth annual event will take place Sept. 15

City Hall Park construction begins next week

Construction to update Red Deer’s City Hall Park is set to begin… Continue reading

WATCH: Medicine River Wildlife Centre opens new playground

The grand opening of the playground was Saturday morning

Indonesia’s Lombok island jolted by multiple quakes

SEMBALUN, Indonesia — Strong earthquakes jolted the Indonesian tourist island of Lombok… Continue reading

Afghan president calls for Eid cease-fire, Taliban to reply

KABUL — Afghan President Ashraf Ghani has called for a conditional cease-fire… Continue reading

Montreal may have less influence after October provincial election

MONTREAL — When Coalition Avenir Quebec Leader Francois Legault recently dismissed the… Continue reading

Privacy issue with online pot sales after legalization needs watching: experts

TORONTO — Buyers who have to provide personal information to purchase recreational… Continue reading

Range of reactions to possible holiday to mark legacy of residential schools

The federal government’s intention to enact a statutory holiday aimed at remembering… Continue reading

Wildfire smoke from B.C. gets in the way of mountain scenery for tourists

JASPER, Alta. — Smoke from wildfires that’s blanketing parts of Alberta does… Continue reading

Fast food chains look to capitalize on vegetarian, vegan trend with new items

The once meat-dominated world of fast-food and casual restaurants is starting to… Continue reading

Thousands to attend funeral service for officers killed in Fredericton shooting

FREDERICTON — Hundreds of people have lined the route of a funeral… Continue reading

Most Read


Five-day delivery plus unlimited digital access for $185 for 260 issues (must live in delivery area to qualify) Unlimited Digital Access 99 cents for the first four weeks and then only $15 per month Five-day delivery plus unlimited digital access for $15 a month