What is the net worth assessment method used by the Minister to determine a taxpayer’s net worth?

In Bigayan v. The Queen, 2000 D.T.C. 1619, Bowman J. (as he was then), at page 1619, called the net worth method “… a blunt instrument, accurate within a range of indeterminate magnitude.” It is commonly referred to as a method of “last resort” because all other methods of verification of the taxpayer’s income figures have failed. By its very nature, the net worth method will result in an approximation of the income of a taxpayer and generally an inaccurate one at best. However, since we live in a self-assessing system, it is the taxpayer who will always be in the best position to know his precise income in a particular period of time. Where the taxpayer has retained the proper records and books, it should be an easy task to identify the Minister’s errors in the net worth assessment and to support the proposed changes with the supporting documentary evidence.