SimpsonWigle Law LLP Tax News

The 2010 federal budget was enacted as law yesterday as S.C. 2010, c. 12. Chapter 12 includes the new rules respecting section 116 of the Income Tax Act.

A few months ago, I wrote a post complaining about how the CRA tends to go after the taxpayers who get the caught in the middle of tax schemes rather than the schemers themselves. Karen Cooper has written an interesting piece on a set of cases where the CRA went after both the schemers and the taxpayers.

The Income Tax Act in numerous places requires interest to be paid, either by the taxpayer or the Minister, on certain overdue amounts. The rate applicable is computed by reference to the “prescribed rate”. The Act also provides for calculating certain kinds of benefits by reference to that same rate. The rate fluctuates each calendar quarter. Usually, the CRA publishes the rate on its website well in advance of each quarter. For some reason, however, the CRA has still not published the rate for 2010 Q3. What is a poor tax adviser to do? Read the rest of this entry »

In Exida.Com Limited Liability Company v. The Queen, 2010 FCA 159, the Federal Court of Appeal dismissed the appeal of the taxpayer from the decision of Justice Woods (see “Contradiction“). The Federal Court of Appeal’s reasoning is surprising and, perhaps, disturbing. Read the rest of this entry »

Joe Monaco presented “Current Tax Cases” at the CRA’s Tax Practitioner’s Consultation Group meeting at the Royal Botanical Gardens this morning.

In Rae v. The Queen, 2010 TCC 130, the taxpayer left his position as the controller of one corporation and joined another. Soon after he started his new employment, he discovered what he thought were serious improprieties in the financial statements and accounting practices of his new employer. He resigned his position but then negotiated a settlement under which he received a large payment for negligent misrepresentation and as damages for retaliation. The CRA took the position that the entire amount received was a retiring allowance. The taxpayer appealed; the Tax Court agreed with him in part. Read the rest of this entry »

I am sometimes asked whether investors who propose to subscribe for shares in the capital of a corporation that has been operating for some time should acquire shares of a separate class. I’ve written a memo that attempts to describe the reasons why using a separate class might be prudent. The memo also mentions briefly some of the problems created by using multiple classes.

The following article appeared in a recent edition of the Hamilton Law Association Law Journal.

The police execute a search at your client’s house. They find pot plants and a large amount of cash. They seize the cash and charge your client with trafficking, and he is later convicted of that crime. Read the rest of this entry »

In Danso-Coffey v. Ontario, 2010 ONCA 171, the Ontario Court of Appeal considered whether Ontario could assess and collect tax from an individual who was supposedly a director of a corporation when, it turned out, she wasn’t. The Court concluded that Ontario could assess and collect the tax if the individual failed to follow the appropriate procedures in the Retail Sales Tax Act (the “RSTA”) for disputing the assessment. Read the rest of this entry »

In Sorbara v. Canada (Attorney General), 2009 ONCA 506, the Ontario Court of Appeal held that the Ontario Superior Court of Justice does not have jurisdiction to hear an application relating to liabilty for GST under the Excise Tax Act (Canada). Parliament has given exclusive jurisdiction over that kind of question to the Tax Court of Canada. The appellant’s application for leave to appeal to the Supreme Court of Canada was dismissed with costs (2009 CanLII 61389). Read the rest of this entry »