Personal Tax, Estate & Wealth Planning

Cridge v. R. - FCA: The Income Tax Act is not unconstitutional

Apr 15, 2016 By Bill Innes

Précis: Ms. Cridge was denied the deduction of certain expenses and a bad debt. Before the Tax Court she argued unsuccessfully that the Income Tax Act (the “Act”) was unconstitutional. Her appeal to the Federal Court of Appeal was dismissed from the bench with costs of $500 to the Crown.
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Cuddy v. R - TCC: Discovery timetable to include follow-up questions

Apr 15, 2016 By Bill Innes

Précis: This is a decision on a scheduling motion for an examination for discovery. The Crown wanted the schedule to provide for follow-up questions arising out of answers to undertakings. The taxpayer objected on the basis that such questions would amount to a second examination for discovery which cannot be conducted without an order of the Court. The Tax Court found that follow-up questions are inherent in the discovery process and accepted the Crown’s position.
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Menzies v. R. - TCC: Tax Court has no jurisdiction over fairness relief

Apr 13, 2016 By Bill Innes

Précis: The taxpayer originally claimed a partnership loss of roughly $88,000 in her 2001 taxation year. The Minister reduced that loss by roughly $20,000 under the terms of a settlement agreement with the partnership. The taxpayer claimed that the reassessment was ineffective because she did not authorize the settlement and did not receive a copy of the Minister’s Notice of Determination and Notice of Redetermination of Loss (the “Determination”). She also claimed interest relief because of the alleged delay of the Minister in reassessing her 2001 taxation year:
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French v. R. - FCA: Partial gifts may be possible in leveraged donation situation

Apr 13, 2016 By Bill Innes

Précis: This appeal was one of a group of tax cases involving so-called leveraged donations, i.e., donations funded in part by loans from promoters. In the notices of appeal Mr. French and the other appellants argued that they should be at least entitled to the portion of the donation made with their own cash. They argued that since partial gifts are permissible under the laws of Quebec taxpayers in other provinces and territories should be entitled to the same relief. The Crown succeeded before the Tax Court in having this pleading struck. Mr. French and the others appealed to the Federal Court of Appeal.
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Karam v. R. - FCA: Appeal dismissed from bench - collateral attack on Tax Court Decision

Apr 08, 2016 By Bill Innes

Précis: Mr. Karam was unsuccessful in the Tax Court which concluded that his share of the gain on a sale of real property was business income. He did not appeal that decision but launched a judicial review application in the Federal Court where he sought to restrain the Minister’s collection activity to the amount of “profit” stated in the notice of confirmation he received in response to his notice of objection. Both parties admitted that the “profit” set out in the notice of confirmation was an error and did not reflect the assessment under appeal in the Tax Court. The Federal Court dismissed the application for judicial review as being a collateral attack on the decision of the Tax Court. Mr. Karam appealed to the Federal Court of Appeal which dismissed the appeal from the bench with costs.
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Korfage v. R. - TCC: Minister entitled to use 2010 currency conversion rate, not running average

Apr 06, 2016 By Bill Innes

Précis: This is an extremely esoteric case. The taxpayer was entitled to a US$12,024 exemption in 2010 on a pension received from the International Civil Aviation Organization. The entire issue before the Court was whether the rate of exchange to be applied in determining the amount of that exemption was the 2010 average exchange rate (which was used by the Minister) or an average rate for the 36 month period prior to and including September 2000 (as contended by the taxpayer). The Court concluded that the Minister’s approach was appropriate and dismissed the appeal. There was no order as to costs since this was an informal procedure appeal.
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Gray v. R. - TCC: Gross negligence penalties sustained in another Fiscal Arbitrators case

Apr 06, 2016 By Bill Innes

Précis: Yet another Fiscal Arbitrators case involving a false business loss claim - this time by an 85 year old taxpayer. The gross negligence penalty was sustained.
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Shevchyk v. R. - TCC: Notwithstanding unusual facts taxpayer entitled to Canada Child Tax Benefit

Apr 05, 2016 By Bill Innes

Précis: This case concerned the appellant’s entitlement to the Canada Child Tax Benefit (“CCTB”) during the months of May and June of 2013. Mr. Shevchyk had a series of very serious accidents as well as a dispute with his oldest daughter, the upshot of which was that although he continued to support all three children they did not live with him during the period of his convalescence. CRA took the position that he was not entitled to CCTB’s for the three children because his oldest daughter had moved out and, CRA claimed, the Children’s Aid Society had taken custody of the two younger children. The Tax Court concluded that Mr. Shevchyk did not lose custody of the younger children and that he supported them and his oldest daughter throughout the period under appeal. As a result the appeal was allowed.
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Urquhart v. R. - FCA: Car salesman’s expenses allowed in part, reversing Tax Court

Apr 04, 2016 By Bill Innes

Précis: Mr. Urquhart acted as a sales manager and commission salesman for a car dealership. His evidence was that he was required to bear some expenses in connection with the commission income he earned selling cars. The Tax Court rejected his evidence. The Federal Court of Appeal reversed the Tax Court in part holding that certain of his expenses were deductible. Since there was mixed success on the appeal there was no order as to costs.
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Tse-Lam v. R. - TCC: Assessment of undisclosed foreign rental income upheld

Apr 04, 2016 By Bill Innes

Précis: The taxpayer failed to disclose rental income in 2006, 2007 and 2008 arising in Hong Kong from a trust connected with the estate of her late mother. In 2010 she filed, through her accountant, a voluntary disclosure and was assessed tax and interest but not penalties. She appealed the assessment to the Tax Court, essentially arguing that the amounts should not be taxable in Canada. The Tax Court dismissed the appeal with costs fixed conditionally at $250.
Tse-Lam v. R. - TCC: Assessment of undisclosed foreign rental income upheldREAD MORE »

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