What is the net worth method used by the Court of Arbitration for Justice to determine whether there is any unreported income in a personal injury case?
Canada (Federal), Canada
The following excerpt is from Coutu v. The Queen, 2018 TCC 143 (CanLII):
The net worth method is defined as follows by the jurisprudence Bigayan v. The Queen, [1999] TCJ No. 778, at paragraph 2 [Bigayan]: 2 . . . It is based on an assumption that if one subtracts a taxpayer’s net worth at the beginning of a year from that at the end, adds the taxpayer’s expenditures in the year, deletes non-taxable receipts and accretions to value of existing assets, the net result, less any amount declared by the taxpayer, must be attributable to unreported income earned in the year, unless the taxpayer can demonstrate otherwise. It is at best an unsatisfactory method, arbitrary and inaccurate but sometimes it is the only means of approximating the income of a taxpayer.
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