R. v. Callidus Capital - FC: Deemed trust under the ETA does not survive bankruptcy

Feb 11, 2016 By Bill Innes

Précis: This is a decision on a point of law arising out of an action by the Crown to collect unpaid GST from a secured creditor of a bankrupt taxpayer. Callidus Capital Corporation, the secured creditor, had received, prior to the bankruptcy, proceeds from the assets of the tax debtor that were deemed to be held in trust under the provisions of the Excise Tax Act (“ETA”). The Federal Court held that the deemed trust did not survive the assignment in bankruptcy. Costs of $2,600 were awarded to Callidus on the application.
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Mcdonald v. R. - FCA: No reversible error in Tax Court - appeal dismissed from bench

Feb 05, 2016 By Bill Innes

Précis: This was an appeal from a decision of Rip J. in the Tax Court who upheld a subsection 160(1) transferee assessment against Ms. Mcdonald on the basis that she had received funds from her husband at a time when he owed income tax and that she hid those funds in a new account she opened. The appeal was dismissed from the bench in three paragraphs; costs were awarded to the Crown of $1,000, all-inclusive.
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7547978 Canada Inc. v. R. - TCC: Penalties sustained for failure to file T4s for employees

Jan 28, 2016 By Bill Innes

Précis: The only point at issue in this appeal was whether CRA was entitled to impose penalties for a failure to file T4 slips for workers found to be employees in separate Tax Court proceedings. The Court concluded that the penalties (imposed under the Income Tax Act) were justified and dismissed the taxpayer’s appeal. There was no costs order as this was an informal procedure appeal
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Barejo Holdings ULC v. R. - TCC: Unusual security was “debt” for the purposes of the ITA

Nov 23, 2015 By Bill Innes

Précis: This decision involves one of the oddest procedures seen in the Tax Court in many years: [1] The question referred to the Court by the parties pursuant to Rule 58 is whether two contracts, entitled Notes and issued for US $998 million by affiliates of two Canadian banks and guaranteed by those banks, which are held by St. Lawrence Trading Inc. (“SLT”), an open-ended investment fund incorporated under the laws of the British Virgin Islands, constitute debt for purposes of the Income Tax Act (the “Act”).
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Myers v. R. - TCC: Court rejects evidence husband’s joint interest in home a drafting error

Nov 20, 2015 By Bill Innes

Précis: Ms. Myers was assessed under subsection 160(1) of the Income Tax Act in respect of the transfer to her by her husband of his share of their home at a time he had an income tax liability. Her defense was that the original acquisition of the home in their joint names was a drafting error and she was always intended to be the sole owner.
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Eleanor Martin v. R. - SCC: Leave application dismissed with costs

Nov 06, 2015 By Bill Innes

Précis: The Supreme Court of Canada dismissed the Martin leave application with costs and without reasons.
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Discovery Trust v. R. - NL SCTD: Beneficiaries did not control Alberta resident trust

Oct 21, 2015 By Bill Innes

Précis: The Discovery Trust was settled by the late Mr. Dobbin 2002. In 2006 he arranged to have its residence moved from Newfoundland and Labrador to Alberta by means of an amendment to the trust document, change of trustees and moving the trust assets to Alberta. The trust filed as a resident of Alberta after the date of the move...
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Devon Canada v. R. - FCA: Court holds CRA accepted new grounds of objection

Oct 20, 2015 By Bill Innes

Précis: Devon Canada Corporation (“Devon”) sought to deduct payments made by predecessor corporatons to their employees in exchange for those employees surrendering various share purchase options (the “Surrender Payments”). In its notices of appeal Devon sought to rely upon section 9 of the Income Tax Act (the “Act”) and, in the alternative, paragraphs 20(1)(b)(eligible capital expenditures) and 20(1)(e) (financing expenses).
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Guindon v. R - SCC: Tax preparer penalties survive a Charter-based challenge

Sep 02, 2015 By Bill Innes

Précis: Ms. Guindon was a lawyer who had issued an opinion which was used to market a charitable leveraged donation program; she was also an officer of the charity involved and signed the tax receipts that were issued totalling $ 3,972,775. She was assessed advisor penalties totalling $546,747 pursuant to subsection 163.2 (4) of the Income Tax Act (the “Act”), the so-called “preparer penalty”.
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Ali v. R. - TCC: Court rejects evidence that all expense documentation lost

Aug 26, 2015 By Bill Innes

Précis: Over the 2007, 2008, 2009 and 2010 taxation years Ms. Ali claimed large deductions for employment and business expenses and tuition. CRA rejected the bulk of her claims as being unsubstantiated. The Tax Court dismissed the appeal. Ms. Ali’s evidence about her expenses was simply not credible.
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