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Posts tagged "Income Tax Act"

Langboung v. R. – TCC: Court rejects evidence of undocumented charitable gifts
Oct 20, 2017 By Bill Innes
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Précis: The taxpayer claimed to have made cash charitable donations in each of 2002 to 2005 which represented a substantial portion of his income in those years. He had no charitable receipts or any other form of documentation. The Court permitted the opening of the 2002-2004 taxation years (which would otherwise have been statute-barred) and dismissed the appeals for all 4 taxation years. There was no order as to costs since this was an informal procedure appeal.
Langboung v. R. – TCC: Court rejects evidence of undocumented charitable giftsREAD MORE »
Cook v. R. – TCC: Child tax credits cannot be prorated where support payable for part of year
Oct 19, 2017 By Bill Innes
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Précis: The taxpayer agreed in 2010 to pay monthly support to her former wife in respect of a son of the marriage. In 2013 the former wife moved and, as a result, agreed that the son would be primarily in the custody of the taxpayer who would pay no further support in respect of the son. The taxpayer claimed dependent and child tax credits under paragraphs 118(1)(b) and (b.1) of the Income Tax Act for 2013. CRA denied the claim on the basis that during part of that year the taxpayer was paying support to her ex-wife in respect of the child. The taxpayer appealed to the Tax Court which agreed with the position of CRA holding that the credits in question could not be prorated. Accordingly the taxpayer’s appeal was dismissed. There was no order as to costs since this was an informal procedure appeal.
Cook v. R. – TCC: Child tax credits cannot be prorated where support payable for part of yearREAD MORE »
Elander v. R. – TCC: Subsection 160(1) assessment not defeated where funds used for household expenses
Oct 18, 2017 By Bill Innes
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Précis: The taxpayer’s husband was a tax debtor. He transferred funds (roughly $62,000) over a period of 5 years either into their joint account or the taxpayer’s personal account. The funds were primarily used for normal household expenses, including mortgage payments on the home which was owned by the taxpayer. The taxpayer argued, unsuccessfully, that $9,500 of the amount at issue had been taken back by her husband immediately and used in his law practice. As to the balance of the funds the taxpayer argued that she gave adequate consideration by providing her husband with a home and necessities. Relying on the prior Federal Court of Appeal decision in Yates, the Tax Court dismissed the appeal holding that the provision of basic necessities did not constitute “consideration” for the purposes of subsection 160(1) of the Income Tax Act. Costs were awarded to the Crown.
Elander v. R. – TCC: Subsection 160(1) assessment not defeated where funds used for household expensesREAD MORE »
Brassard v. R. – FCA: Court of Appeal declines to set aside subsection 160(1) assessment
Oct 17, 2017 By Bill Innes
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Précis: Mr. Brassard’s brother transferred a piece of land with a mobile home to him at a time when he had tax arrears. CRA assessed Mr. Brassard roughly $66,000 as the value of the property less what he had paid for it (which CRA assumed was $50,000). Mr. Brassard lost in the Tax Court and appealed to the Federal Court of Appeal. Mr. Brassard essentially argued that CRA’s valuation of the property was incorrect and attempted to rely upon other evidence of value. The Court of Appeal held that there was no reversible error on the evidence and dismissed the appeal with costs.
Brassard v. R. – FCA: Court of Appeal declines to set aside subsection 160(1) assessmentREAD MORE »
Vrantsidis v. R. – TCC: Adult son with ADHD and learning disability not entitled to Disability Tax Credit
Oct 13, 2017 By Bill Innes
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Précis: The taxpayer sought a disability tax credit (DTC) in respect of her adult (19 years old) son who was diagnosed with Attention Deficit Hyperactivity Disorder (ADHD) and a learning disability. CRA denied the DTC and the taxpayer appealed to the Tax Court. The Court dismissed the appeal on the basis that the taxpayer’s son did not meet the tests of a disability that “markedly restrict[s] his ability to perform mental functions necessary for everyday life, all or substantially all of the time” [para. 13]. There was no order as to costs since this was an informal procedure appeal.
Vrantsidis v. R. – TCC: Adult son with ADHD and learning disability not entitled to Disability Tax CreditREAD MORE »
Shenanigans Media v. R. – TCC: Taxpayer allowed small portion (roughly 10%) of disallowed expenses
Oct 12, 2017 By Bill Innes
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Précis: This case involved both corporate expense claims and assessments against the shareholder for taxable benefits. The shareholder was an extremely young (14-16) but very successful Canadian actor. The disputed amounts were expenses alleged to have been incurred by the corporation to further the taxpayer’s career. By the time the matter made it to the Tax Court most of the outstanding issues had been resolved and there was only roughly $23,000 in dispute over the period from 2009-2011. The Tax Court allowed roughly 10% of the disputed amounts. Thus the appeals of both the corporation and the individual shareholder were allowed in part. There was no order as to costs since this was an informal procedure appeal.
Shenanigans Media v. R. – TCC: Taxpayer allowed small portion (roughly 10%) of disallowed expensesREAD MORE »
Wynter v. R. – FCA: Claiming false business loss amounted to willful blindness – penalties upheld
Oct 03, 2017 By Bill Innes
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Précis: The appellant, who was employed at Chrysler, claimed a business loss of $447,148.31 in 2009. Although the loss was initially allowed, she was subsequently reassessed to deny the loss and a gross negligence penalty of $51,569.49 was applied. The Tax Court dismissed her appeal of the penalty and she appealed to the Federal Court of Appeal. The primary basis of the appeal was that the Tax Court judge erred in imposing too low a standard for a finding of “wilful blindness”. Counsel argued that the test, established in Supreme Court criminal jurisprudence, involved finding an intention to “cheat”. The Federal Court of Appeal rejected this argument holding that imposing a criminal law standard was not appropriate for the imposition of gross negligence penalties under the Income Tax Act (the “Act”).
Wynter v. R. – FCA: Claiming false business loss amounted to willful blindness – penalties upheldREAD MORE »
Arbuckle v. R. – TCC: Gross negligence penalties upheld in “Detax” program
Oct 02, 2017 By Bill Innes
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Précis: The taxpayer, an employee of the Government of Ontario, claimed business losses of $209,664.62 and $167,111.43 in 2008 and 2009, respectively. The losses were part of a “Detax” plan recommended by her tax preparer, Mr. Rasool. CRA denied the losses and imposed gross negligence penalties. The Tax Court rejected much of the taxpayer’s evidence, particularly the suggestion that the losses were added to the returns after she had signed them and without her knowledge. As a result the gross negligence penalties were sustained and the appeal was dismissed with costs to the Crown.
Arbuckle v. R. – TCC: Gross negligence penalties upheld in “Detax” programREAD MORE »
R. v. Repsol Energy Canada – FCA: Tax Court decision in favour of taxpayer upheld
Sep 27, 2017 By Bill Innes
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Précis: The taxpayer claimed that a large regasification plant in Saint John, New Brunswick fell within Class 43 property for CCA purposes. CRA rejected the Class 43 categorization and assessed the property under Classes 1 and 3, resulting in less CCA being available. Justice Campbell Miller of the Tax Court decided in favour of the taxpayer and awarded substantial costs. CRA appealed both the substantive decision and the costs award. The Federal Court of Appeal accepted the decision of the Tax Court both on substance and on costs (technically, there were four appeals involved). Thus CRA’s appeals were dismissed with one set of costs.
R. v. Repsol Energy Canada – FCA: Tax Court decision in favour of taxpayer upheldREAD MORE »
Horn v. R. – TCC: Legal fees not deductible, paid to protect capital assets
Sep 26, 2017 By Bill Innes
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Précis: Mr. Horn through various corporations carried on a business trying to develop First Nations Gaming in Alberta. He obtained financing for his business from two American corporations. As part of the financing he pledged the shares of his main operating company, New Buffalo Gaming Inc. (“New Buffalo”). He sued in Arizona when the American corporations defaulted on the financing. Similarly, he also incurred legal fees in an Alberta action in which the American corporations attempted to enforce their security interest in the New Buffalo shares. He claimed a deduction for the US and Canadian legal fees paid in 2004, 2005 and 2006 as well as a loss carryforward in 2009 arising out of those legal fees. The Tax Court held that neither set of legal fees were not deductible insofar as they were incurred to protect a capital asset, i.e., the New Buffalo shares, which were pledged as part of the financing arrangements. Thus the appeal was dismissed, with costs.
Horn v. R. – TCC: Legal fees not deductible, paid to protect capital assetsREAD MORE »

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