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

Rachel Notley is coming to Red Deer

Speaking at campaign office

Missing woman reported

Last seen in Red Deer

Allies of local LGBTQ community to speak at RDC on Tuesday

Red Deer College is starting a conversation about gender and sexual orientation… Continue reading

Case of Red Deer ex-teacher charged with child sex offences in court

Norman Joseph Howes accused of offences that occurred during 2018 Christmas break

RDSO goes to the movies for blockbuster concert Saturday at Red Deer’s Memorial Centre

‘Star Wars,’ ‘Harry Potter,’ ‘Star Trek’ music on the program

Canadian pair fifth after short program at figure skating worlds

SAITAMA, Japan — Canada’s Kirsten Moore-Towers and Michael Marinaro are fifth after… Continue reading

Director Kim Nguyen tackles financial ‘madness’ in ‘The Hummingbird Project’

TORONTO — As Quebec filmmaker Kim Nguyen tells it, “The Hummingbird Project”… Continue reading

What Disney gets as its $71.3B buy of Fox assets closes

It’s finally complete. Disney closed its $71 billion acquisition of Fox’s entertainment… Continue reading

Opinion: Let’s be heard ‘loud and clear’ during provincial election campaign

By David Marsden During the banquet for Sunday’s Boston Bruins alumni game,… Continue reading

Documentary on Colten Boushie case to open Toronto’s Hot Docs festival

TORONTO — A film examining the case of a young Indigenous man… Continue reading

Want to help bees? Plant flowering herbs

Herbs are among the most useful plants in nature. They can tantalize… Continue reading

UN: Gene editing for human reproduction is ‘irresponsible’

GENEVA — A panel convened by the World Health Organization said it… Continue reading

Photos: Three moose spotted in Red Deer Tuesday

Three moose were spotted in Red Deer Tuesday morning. Red Deer resident… Continue reading

Most Read