Gary Chionis and his wife Isabelle Desbiens have disclosed how the Canada Revenue Agency and Revenue Quebec improperly accused them of failing to report income in 2003. The Revenue Quebec began a tax audit of their restaurant and concluded that the eatery had not reported $1 million in sales. It’s now 16 years since then, and the couple is still fighting for compensation for what proved to be a false determination that they failed to report revenue for their now-closed restaurant.
CFIB’s Corinne Pohlmann said when tax authorities make a mistake of that magnitude, it puts a tremendous financial strain on the business owner, causes them personal stress, hurts their reputation, and sometimes leads to the permanent closure or winding down of the business. As a result, Pohlmann said he urged the Supreme Court to do the right thing and review the Relais decision by the Quebec Court of Appeal.
In Quebec, the court ruled that the method used to determine a failure to report revenue was flawed in 2012. Chionis said he owed lawyers and accountants over $350,000. As a result, he launched a lawsuit against the CRA and Revenue Quebec in 2012 to compensate for these costs and pain and suffering. That same year, Chionis said he had no choice but to shut down his business and set up a small bar.
In 2017 the lawsuit was heard at Quebec Superior Court, and the court ruled against him. The court said Chionis was supposed to file his suit within three years after the accusation. That resolution was appealed before Quebec’s Court of Appeal last year, which overturned the lower court’s judgment.
So far, Chionis has not received any compensation or costs; he is hopeful the Supreme Court of Canada will hear his compensation case so that his case will be a lesson to the CRA and RQ responsible for financial harm to people businesses. Speaking in an interview, Chionis said he estimates he will owe no less than $800,000 in legal and accounting fees by the time Canada’s top court hears his case.
The CFIB’s Pohlmann said her organization wants to see the case is heard because tax agencies in Canada should be held responsible for their mistakes. Besides, she said guidance from the Supreme Court of Canada on this matter could have the effect of reversing the current confrontational culture found in parts of Canada’s tax administration regimes and bring a more collaborative approach to their relations with taxpayers by allowing them to achieve their taxation mission while respecting the realities of independent businesses.
Chionis said in one way; he felt happy that he managed to get that decision in the appeal court so he could avoid a nightmare like that happening to somebody else. But at the same time, he said he felt that they’d been cheated.
Furthermore, Chionis said there was nothing worse than being accused of anything, and especially something that destroyed his business destroyed family relationships and destroyed him financially.