Bill Innes on Current Tax Cases

Ghosi v. R. – TCC: Taxpayer not entitled to New Housing Rebate – no evidence of intent to change place of residence

May 27, 2019 By Bill Innes

Précis: The taxpayer claimed a New Housing Rebate of $24,000 in connection with the purchase of a property located at 128 Novan Crescent in Aurora, Ontario. The taxpayer was a teacher and he and his wife had lived in the same home in Markham since 2005. The agreement of purchase and sale was signed in 2015 by the taxpayer, his wife and a family friend. The evidence was that the family friend wanted a place where her son could move because of ongoing disputes with his father. Title to the property was transferred in January of 2016 and in March the taxpayer moved some basic necessities to the house, retaining ownership of his home in Markham where most of his personal belongings remained. Although the taxpayer testified that he planned to rent and renovate the Markham property that never happened and he and his wife moved back there in June of 2016. The Tax Court Judge concluded that the taxpayer never formed a settled intention to treat the Aurora property as his primary and permanent place of residence. As a result the appeal was dismissed but without costs since this was an informal procedure appeal.
Ghosi v. R. – TCC: Taxpayer not entitled to New Housing Rebate – no evidence of intent to change place of residenceREAD MORE »

Goheen v. R. – FCA: Crown not required to amend pleadings to rely upon evidence disclosed by discovery of taxpayer – no reversible error

May 22, 2019 By Bill Innes

Précis: The taxpayer claimed a US $30,000 charitable donation which CRA denied on the basis of absence of donative intent and imposed gross negligence penalties. During discoveries of the taxpayer it appeared that US $30,000 was subsequently deposited in the same account from which the alleged donation was made. The Crown relied upon that evidence at trial and the Tax Court dismissed the taxpayer’s appeal. The taxpayer appealed to the Federal Court of Appeal arguing, in part, that the Crown should have amended it pleadings if it intended to rely upon the US $30,000 deposit to support the disallowance of the alleged gift. The Court of Appeal dismissed the appeal from the bench holding that the deposit was simply evidence of the taxpayer that was relied upon by the Crown to support its assessing position, i.e., absence of donative intent. Costs were awarded to the Crown.
Goheen v. R. – FCA: Crown not required to amend pleadings to rely upon evidence disclosed by discovery of taxpayer – no reversible errorREAD MORE »

Trower v. R. – TCC: Amounts of dividends paid without proper corporate authority not taxable in the hands of former director/shareholder

May 16, 2019 By Bill Innes

Précis: The taxpayer and her estranged spouse were shareholders and directors of Cove BD Inc. (Cove). They separated in the Fall of 2015. The taxpayer ceased to be a director and shareholder of Cove on October 2, 2016 (or, possibly, September 30, 2016). In February of 2017 her husband caused Cove to declare retroactive dividends of $50, 342 payable to the taxpayer in 2016 (representing a taxable amount of $58,900). CRA assessed her in respect of the alleged dividends and she appealed to the Tax Court. The Tax Court Judge found that Cove could not legally pay dividends to the taxpayer in respect of the period of 2016 in which she was a director and shareholder without her concurrence, which she had not given. Accordingly the appeal was allowed. The parties were to bear their own costs.
Trower v. R. – TCC: Amounts of dividends paid without proper corporate authority not taxable in the hands of former director/shareholderREAD MORE »

Burton v. R. – TCC: Insufficient evidence of binding legal agreement to permit deduction of support payments in 2013

May 14, 2019 By Bill Innes

Précis: The taxpayer sought to deduct spousal support payments made in 2013. CRA allowed deductions for payments made in 2014 and 2015 on the basis that a finalized separation agreement was entered into in 2015 since under the provisions of the Income Tax Act deductions were permitted in “the year and previous year” in which the agreement was reached. CRA denied the deduction for 2013 on the basis that no binding separation agreement was reached in either 2013 or in 2014. The taxpayer appealed to the Tax Court which agreed with CRA’s position and dismissed the taxpayer’s appeal, but without costs since this was an informal procedure appeal.
Burton v. R. – TCC: Insufficient evidence of binding legal agreement to permit deduction of support payments in 2013READ MORE »

Creteco-Gunner Corporation v. R. – FCA: Taxpayer not denied procedural fairness in Tax Court - appeal dismissed

May 10, 2019 By Bill Innes

Précis: The taxpayer was assessed EI and CPP in respect of its workers. It appealed to the Tax Court and the appeal was dismissed from the bench. It further appealed to the Federal Court of Appeal raising two arguments: The Tax Court Judge had denied the taxpayer procedural fairness in not assisting with the taxpayer’s conduct of its case. The Tax Court Judge relied upon a document marked for identification only. The Court of Appeal rejected both arguments and dismissed the appeal with costs.
Creteco-Gunner Corporation v. R. – FCA: Taxpayer not denied procedural fairness in Tax Court - appeal dismissedREAD MORE »

CRL Engineering Ltd. v. R. – TCC: “Real‑Time Vehicle Arrival Prediction Model for Transitlive” research project to predict movements of transit buses was entitled to SRED credits

May 01, 2019 By Bill Innes

Précis: The taxpayer claimed SRED credits for a research project known as “A Real‑Time Vehicle Arrival Prediction Model for Transitlive” which was designed to provide accurate real‑time predictions for public transit bus movements. The Court reviewed the five traditional tests for determining whether research met the SRED criteria and concluded that this project did. Thus the appeal was allowed, limited to $25,000 per taxation year since the appellant had pursued the informal procedure option.
CRL Engineering Ltd. v. R. – TCC: “Real‑Time Vehicle Arrival Prediction Model for Transitlive” research project to predict movements of transit buses was entitled to SRED creditsREAD MORE »

Archives - May 2019

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