Recent Posts

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  Chiang v. R – TCC: Taxpayer not liable for penalties on over-contribution to RRSP

  Sep 18, 2017 By Bill Innes

  Categories:

  • Bill Innes on Current Tax Cases
  • Federal Income Tax
  • Personal Tax, Estate & Wealth Planning

  Précis: This is an unusual case where the taxpayer innocently, but mistakenly, over-contributed to his RRSP for three years in the 90’s. CRA assessed him under Part X.1 of the Income Tax Act (the “Act”) with tax and penalties in respect of that over-contribution. Mr. Chiang appealed both the tax and the penalties. The Court dismissed the appeal as to the tax payable but allowed the appeal on penalties. The Court found that on the evidence Mr. Chiang had established a due diligence defence that precluded the application of penalties.
  Chiang v. R – TCC: Taxpayer not liable for penalties on over-contribution to RRSPREAD MORE »
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  Aon Inc. v. R. - TCC: Replacing 50% of the roof of a parking garage ($4 million) a deductible expense.

  Sep 07, 2017 By Bill Innes

  Categories:

  • Bill Innes on Current Tax Cases
  • Corporate Tax
  • Federal Income Tax

  Précis: The taxpayer expended roughly $4 million over a period of two years replacing a large portion of the roof of an underground parking garage that had been damaged by salt. The taxpayer sought to deduct the expense as a current operating cost. The area involved was roughly 47,000 square feet which was about 50% of the size of the parking area; a sizeable portion of the remaining area was covered by three buildings and not exposed to the same damage. CRA denied the deduction as being a capital expenditure. The Tax Court accepted the position of the taxpayer and allowed the appeal with costs.
  Aon Inc. v. R. - TCC: Replacing 50% of the roof of a parking garage ($4 million) a deductible expense.READ MORE »
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  McCullock-Finney v. R. - TCC: Appellant’s intention to claim a Capital Gain Deduction in 1994 not effective

  Aug 10, 2017 By Bill Innes

  Categories:

  • Bill Innes on Current Tax Cases
  • Federal Income Tax
  • Personal Tax, Estate & Wealth Planning

  Précis: The taxpayer (since deceased) claimed a capital gains deduction in respect of two rental properties she disposed of in 2010 (which she had owned since 1979). CRA denied the deduction on the basis that she had not filed the requisite election with her 1994 income tax return. Her estate appealed to the Tax Court. The Tax Court dismissed the appeal. While the taxpayer might have intended to file the election in question there was no evidence that she had in fact filed it with her 1994 tax return. There was no order as to costs since this was an informal procedure appeal.
  McCullock-Finney v. R. - TCC: Appellant’s intention to claim a Capital Gain Deduction in 1994 not effectiveREAD MORE »
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  Sharp v. R. - FC: “Fabricated” evidence allowed to remain on record with appropriate notation

  Aug 04, 2017 By Bill Innes

  Categories:

  • Bill Innes on Current Tax Cases
  • Federal Income Tax
  • Other

  Précis: The applicants moved to set aside a ministerial requirement for information under subsection 231.1(2) of the Income Tax Act on the basis that it was being used to further a criminal investigation of their affairs. In support of the application the applicants tendered an affidavit of a Ms. Kaiser which purported to attach correspondence involving an employee of CRA. That correspondence was found to have been fabricated. The sole question before the Court not already agreed upon by the parties was whether the fabricated correspondence should continue to form part of the record with an appropriate notation that it was fabricated (the position of the Crown) or whether it should be removed and replaced by a fresh affidavit provided by the applicants (the position of the applicants).
  Sharp v. R. - FC: “Fabricated” evidence allowed to remain on record with appropriate notationREAD MORE »
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  The Mark Anthony Group v. R. - TCC: Product added after fermentation of cider does not vitiate duty exemption

  Jul 31, 2017 By Bill Innes

  Categories:

  • Bill Innes on Current Tax Cases
  • Federal Income Tax
  • Other

  Précis: The taxpayer manufactured fermented cider. It claimed an exemption (roughly $2 million) under the Excise Act, 2001 (the “EA”) on the basis that all of the products used in the fermentation process were of Canadian origin. CRA denied the...
  The Mark Anthony Group v. R. - TCC: Product added after fermentation of cider does not vitiate duty exemptionREAD MORE »
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  Mullings v. R. - TCC: Child with PKU disorder eligible for disability tax credit

  Jul 20, 2017 By Bill Innes

  Categories:

  • Bill Innes on Current Tax Cases
  • Federal Income Tax
  • Personal Tax, Estate & Wealth Planning

  Précis: The taxpayer’s youngest child, X, suffered from “classical phenylketonuria (“PKU”). PKU is a genetic disorder that eliminates or severely restricts the body’s ability to metabolize phenylalanine (“Phe”)” [para. 1]. Left untreated PKU can lead to brain damage. The taxpayer, who was very familiar with PKU since her first child also suffered from it (the older child was not a subject of the appeal), followed a very vigilant regimen to protect X’s health. The question before the Court was whether PKU fell within the definition of “mental or physical impairment” for the purposes of the disability tax credit (“DTC”). CRA held it did not and the taxpayer appealed to the Tax Court.
  Mullings v. R. - TCC: Child with PKU disorder eligible for disability tax creditREAD MORE »
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  Cougar Helicopters v. R. - TCC: Rule 58(1) not appropriate for resolution of statute-barring issue

  Jul 18, 2017 By Bill Innes

  Categories:

  • Bill Innes on Current Tax Cases
  • Corporate Tax
  • Federal Income Tax

  Précis: The taxpayer moved for a determination under Rule 58(1) whether the reassessment under appeal was void ab initio because it was not accompanied by an allegation that the Appellant made any misrepresentation or committed any fraud in filing its tax returns or in supplying any other information under the Act for its 2011 taxation year ended December 31, 2011. The Tax Court dismissed the application on the basis, inter alia, that an allegation of misrepresentation or fraud was implicit in the issuance of an otherwise statute-barred reassessment. As a result the application was dismissed with costs to the Crown in any event of the cause.
  Cougar Helicopters v. R. - TCC: Rule 58(1) not appropriate for resolution of statute-barring issueREAD MORE »
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  Marples v. R. - TCC: Another Rule 58 application bites the dust - complaints about SIN taxes it seems

  Jul 18, 2017 By Bill Innes

  Categories:

  • Bill Innes on Current Tax Cases
  • Federal Income Tax
  • Personal Tax, Estate & Wealth Planning

  Précis: Mr. Marples was assessed tax and penalties in respect two sources of unreported income. He ultimately accepted tax on both of the sources, in excess of $1 million of insurance commissions, but disputed the penalties. He sought to have his appeal determined in part under a Rule 58 application in which he seems to suggest that the taxation of his commission income depended upon the use of the terms “social insurance number”, “Social Insurance Number” and “SIN” in various part of the Income Tax Act, Regulations and forms. Presumably he also wanted to argue that this confusion should relieve him of penalties imposed on such income.
  Marples v. R. - TCC: Another Rule 58 application bites the dust - complaints about SIN taxes it seemsREAD MORE »
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  Woessner v. R. - TCC: Firm removed from file where its lawyers would be material witnesses

  Jul 17, 2017 By Bill Innes

  Categories:

  • Bill Innes on Current Tax Cases
  • Federal Income Tax
  • Personal Tax, Estate & Wealth Planning

  Précis: The Crown moved to disqualify taxpayer’s counsel on the basis that lawyers of the firm would be material witnesses at trial. The Court allowed the motion, with costs.
  Woessner v. R. - TCC: Firm removed from file where its lawyers would be material witnessesREAD MORE »
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  Lawson v. R. - TCC: Joint custody taxpayer entitled to dependent tax credits

  Jul 17, 2017 By Bill Innes

  Categories:

  • Bill Innes on Current Tax Cases
  • Federal Income Tax
  • Personal Tax, Estate & Wealth Planning

  Précis: In the case of joint custody of children there is a considerable body of case law that a parent making a support payment is not entitled to dependent tax credits unless the other parent makes similar payments. The courts have held that a netting of support obligations resulting in one parent making the net payment to the other does not suffice for these purposes and the payer parent is not entitled to tax credits. In this case Mr. Justice Miller accepted, on the peculiar facts before him, that the intention of the parties was that each would make a support payment and that the net payment made by the husband (which also took into account travel expenses on top of his support obligations) was not central to their bargain. On that basis he was prepared to allow Mr. Lawson the credits claimed for 2013. There was no order as to costs since this was an informal procedure appeal.
  Lawson v. R. - TCC: Joint custody taxpayer entitled to dependent tax creditsREAD MORE »