Taxman claims B.C. polygamist owes bounty in back taxes

National Post, Canada/February 9, 2012

British Columbia's settlement of Bountiful is named for a land flush with fruit and wild honey, as described in the Book of Mormon, but another form of bounty is the focus of a Vancouver trial: back taxes, penalties and interest amounting to $4.3-million claimed by the government from the founder of the polygamous sect.

Evidence in the unusual tax case — with sister pitted against brother and a teen bride sticking up for her husband in dramatic tell-all testimony on arranged marriages, multiple wives and doomsday preparations — is also bringing abundant acrimony.

Winston Blackmore, described as a bishop in the Fundamentalist Church of Jesus Christ of Latter-Day Saints, is fighting allegations of under-reporting business income in 2000-06.

While the Tax Court of Canada case is ostensibly about taxation, it provides a rare insight into life in Bountiful, a breakaway group from mainstream Mormonism, and a landmark challenge to the government's definition of a religious congregation that is taking centre stage.

During his testimony, Mr. Blackmore inadvertently put a sharp focus on his religious lifestyle when he stumbled trying to remember the name of the 14th of his 22 wives.

"Let me think about that for a minute," he said, smiling ruefully and sitting for a minute silently counting before coming up with an answer. He has more than 65 children but is unsure of the exact number.

Over the past few weeks, court also heard from Marlene Palmer, 53, a sister of Mr. Blackmore and a member of the community for 50 years before leaving.

She was raised from birth in the sect; her father was Bountiful's first bishop. After he died, her full brother, Winston, took over. She and Mr. Blackmore were two of more than 30 siblings.

Her special lineage won her no slack. She took the stand last week for the government and told of a 9 p.m. meeting in 1975 when she and Mr. Blackmore spoke with the community's prophet.

"I had finished high school and I wanted to go on with my education," she said of her plans.

"I told him I wanted to go to school to be [a registered nurse] and a midwife. I was going to change the world and all that good stuff. But [the prophet] said I had another calling — to just be a wife.

"I was married by 9:20 that night."

She was bound in a religious ceremony to Marvin Palmer, who was already married to her older sister, Miriam.

"I didn't want to marry him. I didn't like him," she said.

When her husband left the community in 1989, she became the third wife of his half-brother, who was already married to two of her nieces.

Before she left in 2008, Ms. Palmer worked as a book­keeper for Mr. Blackmore and said she advised him to register as a church for tax consideration, advice he ignored.

Court also heard from Marjorie Johnson, who was 19 when she and her sister were both married to Mr. Blackmore on the same day in 1990.

A fourth-generation fundamentalist Mormon, Ms. Johnson had 10 children with Mr. Blackmore, but never lived with him in the same house, instead sharing quarters with some of his other wives. She testified on her husband's behalf.

She cried when asked about a schism in 2002, when about 400 of the 1,000 Bountiful residents followed Mr. Blackmore when he was excommunicated from the church by its president, Warren Jeffs, now serving a life sentence in Texas for child sexual assault related to under-age "celestial brides."

The feud tore the community apart, Ms. Johnson said. The Blackmore group had to build a new school after his followers' children were shunned. About 75% of its students are Mr. Blackmore's offspring.

It all prompted government lawyer Lynn Burch to describe the group as a "splinter group of a splinter group."

"The community of Bountiful is a male-dominated, patriarchal society," government lawyers wrote in court filings.

"Women have no say or participation in the running of the community."

But despite the moral disdain, at issue is whether Mr. Blackmore used company money to pay personal expenses of himself and his enormous family, while claiming it was tax-free congregation money.

The tax agency takes issue with his tax returns from 2000 to 2006. He claimed taxable income of $20,915 in 2000, for instance, when the government pegged it at $277,395. Similar disputes followed in subsequent years.

It is, the government alleges, "a purposeful and deliberate plan" to avoid corporate taxes while benefiting his family, including payments for an aircraft, rent, tuition, meals, insurance, vehicles and other expenses.

If a religious leader is "a shepherd, the role of a good shepherd is to shear the sheep, not skin it," Ms. Burch argued in court.

Mr. Blackmore argued in court filings the members are congregants living communally.

"All the members of the congregation are required to devote their working lives to the activities of the congregations," his lawyer said. In Bountiful parlance, members "consecrate their time, talents, money and materials."

The evidence proved more voluminous than anticipated. Judge Diane Campbell has extended the trial by another week.

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