SimpsonWigle Law LLP Tax News

“Government of Canada Moves Quickly on Seniors’ Tax Relief and Other Outstanding Measures“. But can the government act quickly enough?

eBay Canada Ltd. v. Canada (National Revenue), 2008 FCA 348 is now available on CanLII. The Court held that information on servers in the U.S. is not foreign-based information. (more…)

Thursday last I tried, once again, to explain the restrictive covenant rules in proposed section 56.4 of the Income Tax Act (Canada) to a seminar hosted by the Hamilton Law Association (please send an email to me if you would like a copy of the PowerPoint presentation). I’m not sure how well I succeeded. I find the rules difficult to work with and impossible to explain because they are so full of apparently random tricks and traps. (more…)

Assume that Corp X owes tax to the CRA. Assume that, while it owes that tax, Corp X pays a dividend to Mr. X who deals not at arm’s length with the corporation. What can the CRA do about it (assuming that the corporation is then unable to pay the tax it owes)? It is well established that the CRA can issue an assessment to Mr. X under section 160 of the Income Tax Act (Canada). For a recent case affirming this rule, see Larouche c. La Reine, 2008 CCI 448.

In Corsi v. The Queen, 2008 TCC 472, the CRA sent a 160 assessment to the taxpayer by registered mail in June, 2004, to her home address, which was not the address the CRA had on file for the taxpayer. For whatever reason, the taxpayer didn’t pick up the mail, and it was returned to the CRA. The CRA did nothing more with the assessment, but some time thereafter CRA Collections started calling the taxpayer. This was the first she heard about the assessment. The CRA then mailed a copy of the assessment to the taxpayer’s accountant in October, 2005, more than one year and 90 days after the first assessment was supposedly sent. (more…)

Someone forwarded to me an email from a local accountant who was warning his clients who own mutual funds about large capital gains distributions that funds will be required to make at the end of this year because of record redemptions of units during the recent market slide. (more…)

Michael Van Severen, who is a member of the cross-border tax services group at KPMG in Hamilton, was kind enough to forward to me a “Tax Tip-Off” (I thought it said “Tax Rip-Off” when I first received it). The tip reads in part:

Many Canadian businesses that ship products into the state of Michigan may now be surprised to learn that they are subject to the gross receipts tax component of the Michigan Business Tax (MBT). Also, many Canadian businesses that historically did not have any Michigan sales under the old sourcing rules may now have Michigan sales for purposes of determining apportionment for the MBT and therefore may have a significant MBT liability if total Michigan sales are more than $350,000 during the year.