I’ve seen a number of cases where a family member consents to be a director of a corporation—exactly why nobody seems to know after the fact—and then ends up being assessed for unremitted source deductions. The family member might be uneducated and barely able to speak English, but that won’t stop the assessments. The CRA and the Ministry of Revenue are unsympathetic. The courts are less cold-blooded it seems. (more…)
Tax Court litigation—or any other kind of litigation for that matter—is inherently unpredictable. Take Pigeau v. The Queen, 2009 TCC 582, for example. In that case, a key issue was the value of a property transferred from an individual to his grandfather. The taxpayer, who had the onus of proving value, showed up with nothing more than an MLS listing and a report that couldn’t be entered into evidence because the agent failed to give the proper notice. The Minister, on the other hand, had an expert’s appraisal in hand and the expert available to testify. The expert’s report was duly received, but the taxpayer still won, however, because the judge gave the benefit of the doubt to the taxpayer in choosing values from the ranges given by the expert. Which just goes to show you.
In Skinner v. The Queen, 2009 TCC 269, the taxpayer had reported as income in 2001 a large shareholder loan that had not been repaid. In 2002, the taxpayer attempted to deduct the amount previously included in income because the shareholder loan had been repaid. The Minister reassessed to reduce the taxpayer’s income in 2001 by reversing the inclusion for the shareholder loan. The Minister also reassessed to deny the deduction in 2002 because, after giving effect to the reassessment for 2001, the requirements of paragraph 20(1)(j) had not been met. The taxpayer appealed to the Tax Court of Canada, but the appeal was dismissed essentially on procedural grounds. (more…)
Last week I gave a speech to the CRA tax consultation group on tax cases of interest. Joe Monaco and I wrote the speech. You can get a pdf copy here. I believe that all of the cases mentioned in the presentation are under appeal!
I spoke yesterday on Garron and Antle at the Hamilton Law Association’s annual trusts and estates seminar.
The cartoonist Andrew Donato donated his cartoons and claimed a tax credit for the fair market value of them. The CRA didn’t dispute the amount of the credit he could claim, but it took the position that he had realized a capital gain on making the gift. The Tax Court agreed with the CRA in Donato v. The Queen, 2009 TCC 590. (more…)
Given the economic climate, it’s not surprising that we are receiving a lot questions about allowable business investment losses (ABILs). Nor is it surprising that many taxpayers find it difficult to claim ABILs, given the many pitfalls. (more…)
A recent Tax Court of Canada decision raises concerns of double taxation in proposed US health care reforms. The case is Niemeijer v. The Queen, 2009 TCC 624. (more…)
In Canada Trustco Mortgage Company v. The Queen, 2008 TCC 482, aff’d 2009 FCA 267, the Tax Court held that a financial institution must comply with a requirement to pay even where the the funds sought to be seized from the institution were held in a lawyer’s trust account. (more…)
Taxpayers who participated in ‘retail’ donation tax shelters continue to fare poorly in the Tax Court. See Maréchaux v. The Queen, 2009 TCC 587. (more…)
In Payette v. The Queen, 2009 TCC 348, the taxpayer, a retired accountant, was attempting to develop a novel propulsion system for interstellar exploration. He claimed business expenses and SRED tax credits for his efforts. The Minister was skeptical, perhaps because ‘Mr. Payette was able to prove the concept worked “to my satisfaction but not to anyone else’s”‘. Indeed, the Canadian Space Agency found the following, according to the Court: (more…)
