Aimurie v. R. - TCC: Assessment of unreported income based on bank deposit analysis upheld

Aimurie v. R. - TCC:  Assessment of unreported income based on bank deposit analysis upheld

Aimurie v. The Queen  (July 11, 2016 – 2016 TCC 164, V. Miller J.).

Précis:   Mr. Aimurie operated a tax preparation and cheque cashing business in the years from 2003 to 2010.  He reported little or no income from the business.  CRA did a bank deposit analysis and concluded that he had significantly under-reported his business income.  He was reassessed for these years opening up statute-barred years where necessary and imposing gross negligence penalties.   His spouse, Ms. Charles, was also reassessed denying her non-refundable tax credits in respect of Mr. Aimurie in 2008 and 2009 since his income, as reassessed, exceeded the spousal credit threshold.  Both appeals were dismissed.  There was no order as to costs.

Decision:   In the case of Mr. Aimurie the appeal boiled down to a reconstruction of his business income based on bank deposits:

[4]             The Minister of National Revenue (the “Minister”) performed a bank deposit analysis and reassessed Mr. Aimurie for his 2003, 2004, 2005, 2006, 2007, 2008 and 2009 taxation years to include unreported amounts in his income. Mr. Aimurie was arbitrarily assessed for his 2010 taxation year. The reassessments for the 2003 to 2007 years were made beyond the normal reassessment period pursuant to subsection 152(4) of the Income Tax Act (the “Act”). Penalties were assessed for the 2003 to 2009 years pursuant to subsection 163(2) of the Act.

[5]             The net business income/loss reported by Mr. Aimurie and the unreported amounts included in his income were as follows:


Unidentified Deposits

Net Business Income/Loss Reported

Unreported Income

































Total Unreported Income





[6]             The witnesses at the hearing were Mr. Aimurie and Macille Poon who is the auditor with the Canada Revenue Agency (“CRA”) who worked on Mr. Aimurie’s file.

[7]             During the relevant years, Mr. Aimurie operated a tax preparation, accounting and cheque cashing business (the “Business”). The Business was operated under various names including, Lawsco Accounting and Income Tax Services (“Lawsco”), “CashPal” and “Cashpal Financial Management Services Incorporated”.


The Court did not accept Mr. Aimurie’s evidence that the deposits were corporate income, not his personal income:

[8]             The Minister assumed that each of these businesses was operated as a sole proprietorship whereas Mr. Aimurie claimed that “Cashpal Financial Management Services Incorporated” was a corporation and the money earned by it should not be included in his income. I do not believe Mr. Aimurie. It would have been very easy for him to support his statement with a document but he brought no documents in spite of the fact that he knew, prior to the hearing, that this would be an issue. In addition, there was evidence that the alleged corporation used the same bank account as “Cashpal”. I have concluded that Mr. Aimurie operated the entire Business as a sole proprietorship and I will refer to “Cashpal Financial Management Services Incorporated” as “Cashpal”.

The Court found that the facts justified opening up the statute-barred years and the imposition of gross negligence penalties.

In the appeal of Ms. Charles she was not entitled to the spousal credits she claimed in 2008 and 2009 since Mr. Aimurie’s income, as reassessed, exceeded the statutory threshold:

[29]        In calculating the amount of tax she had to pay in 2008 and 2009, Ms. Charles claimed non-refundable tax credits for spousal amounts of $8,018 and $5,876 respectively.

[30]        In order to be eligible to claim the spousal amount in 2008 and 2009, Ms. Charles had to be married to Mr. Aimurie and she had to support him.

[31]        However, I have found that Mr. Aimurie had net business income of $107,635 and $161,721 in 2008 and 2009. It is clear that Mr. Aimurie was not dependent on Ms. Charles for support in 2008 and 2009.

As a result both appeals were dismissed.  There was no award of costs in either appeal although Mr. Aimurie’s appeal was a General Procedure Appeal.