Personal Tax, Estate & Wealth Planning

Copeland v. R. - TCC: Taxpayer liable under subsection 160(1) for transfer from related corporation

Aug 09, 2016 By Bill Innes

Précis: Mr. Copeland received cheques totally $111,000 from a related corporation, Tradepro, at a time when it was a tax debtor. As a result he was assessed under subsection 160(1) for the amount of tax debt of Tradepro at the date of the transfer. Mr. Copeland testified that the cheques were partial repayment of a loan made by his late father (who also used the same middle name, Blaine) to a predecessor corporation of Tradepro and that he held the funds as the agent of his father. Unfortunately for Mr. Copeland the Court did not accept his evidence or that of his bookkeeper and the appeal was dismissed with costs.
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Gorman v. R. - TCC: Shares acquired by RRSP not qualified investments, penalties sustained

Aug 09, 2016 By Bill Innes

Précis: The taxpayer was persuaded by a promoter to acquire shares of 629900 Saskatchewan Ltd. (“629900”) in her RRSP. She relied upon the promoter’s promises of a 50% to 100% return on her investment within one to two years. CRA assessed her on the basis that the shares were not qualified investments for an RRSP and imposed gross negligence penalties. The Tax Court upheld both the assessment and the penalties. Costs were awarded to the Crown.
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Omoruan v. R. - TCC: Charitable donations denied, statute-barred year opened, taxpayer not credible

Aug 05, 2016 By Bill Innes

Précis: The taxpayer claimed charitable donation credits in the 2003, 2004, 2005 and 2006 taxation years of $9,533, $15,700, $12,360 and $8,033 respectively. She claimed that the donations included cash as well as gifts in kind including used shoes and toys. Quite simply the Tax Court rejected her evidence and dismissed the appeals. The Court upheld the assessment of 2003 notwithstanding the fact that it was otherwise statute-barred. There was no order as to costs as these were informal procedure appeals.
Omoruan v. R. - TCC: Charitable donations denied, statute-barred year opened, taxpayer not credibleREAD MORE »

Melman v. R. - TCC: $18.85 million in dividend income unreported, gross negligence penalties sustained

Aug 05, 2016 By Bill Innes

Précis: Mr. Melman omitted to include $15,080,000.00 in dividends (yielding $18,850,000.00 in taxable dividends) in his 2007 tax return filed in April of 2008. This resulted in an understatement of his tax payable by a factor of 12.5. The Court found that Mr. Melman was a highly educated, meticulous person who planned his tax affairs in consultation with his accountants and had set aside a reserve fund for his 2007 taxes in the amount of $4,725,000.00. However he claimed not to have reviewed his 2007 return before signing it and only paid $359,604.43 based on the return filed.
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Blackwell v. R. - TCC: Appeal quashed as taxpayer never objected to underlying reassessment

Aug 04, 2016 By Bill Innes

Précis: The taxpayer’s Notice of Appeal purported to appeal his 2008 taxation year however he had never filed a notice of objection to the second notice of reassessment for that year. As a result the Court granted the Crown’s motion to strike the appeal. It awarded costs fixed at $625 to the Crown. In light of the conduct of Mr. Blackwell’s representative, Mr. Garrison, the Court gave him 30 days to make submissions why he should not be ordered to pay all or part of Mr. Blackwell’s costs personally.
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Hayfron- Benjamin v. R. - TCC: Taxpayer victim of identity theft, appeal allowed

Aug 04, 2016 By Bill Innes

Précis: The taxpayer was assessed for unreported employment income in the amount of $5,759 in 2011. The taxpayer was able to establish on the evidence that the amount had been depostited to the bank account of his brother, Albert, and that the taxpayer had never been employed by the employer in question. There was no order as to costs.
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Bauer v. R. - TCC: Large portions of taxpayer’s Notice of Appeal struck

Aug 03, 2016 By Bill Innes

Précis: The Crown moved to strike at least 38 full paragraphs of the taxpayer’s Notice of Appeal and portions of other paragraphs of the Notice of Appeal. The provisions in dispute all essentially attacked the conduct and motivation of CRA in assessing the taxpayer. The Court concluded that the provisions had no likelihood of success, were abusive and would unduly delay the proceedings. As a result the provisions were struck. The taxpayer was denied leave to file an amended Notice of Appeal elaborating on the disputed provisions. The Crown was given 60 days to file an amended Reply. The Crown was awarded costs fixed at $1,000.
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Klundert v. R. - TCC: Payments to wife of tax debtor physician subject to subsection 160(1)

Aug 03, 2016 By Bill Innes

Précis: This may be one of the last chapters of the Klundert litigation about a tax protesting doctor. In this case roughly $1,000,000 had been transferred at Dr. Klundert’s direction by OHIP to his wife’s account during a period when he was a tax debtor. CRA assessed Mrs. Klundert under subsection 160(1) in respect of the transfer. The Tax Court rejected the appeal with the exception of a small ($3,614.51) adjustment. Somewhat unusually, there was no order as to costs.
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Shahbazi v. R. - TCC: Court rejects receipts for charitable donations in kind

Aug 02, 2016 By Bill Innes

Précis: Mr. Shahbazi claimed to have made gifts in kind to charities in 2006 ($20,000) and 2007 ($15,000) which CRA denied and he appealed to the Tax Court. The Tax Court rejected the appeal on the basis that the receipts were deficient, i.e., they did not describe the property in kind which was allegedly donated. There was no order as to costs since this was an informal procedure appeal.
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Thibeault v. R. - TCC: Taxpayer not engaged in a vessel leasing business in 2008 and 2010

Jul 29, 2016 By Bill Innes

Précis: The taxpayer had a number of business interests including vessels and marine permits which he held personally. In 2008 he leased one vessel and offset the rental income with a large capital cost allowance claim which resulted in a loss for tax purposes. In 2010 he sold one of his permits and against claimed capital cost allowance against the sale proceeds. CRA limited his capital cost allowance pursuant to Regulation 1100(15) to the amount of his rental income. The taxpayer argued that he was engaged in a vessel leasing business in both taxation years with the result that Regulation 1100(15) did not operated to limit his capital cost allowance claims in either year. The Tax Court found that the taxpayer was not engaged in a vessel leasing business in either taxation year and dismissed the appeal with costs.
Thibeault v. R. - TCC: Taxpayer not engaged in a vessel leasing business in 2008 and 2010READ MORE »

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