Grenon v. R. - FCA: No deduction for legal fees of child support payor

Jan 21, 2016 By Bill Innes

Précis: Mr. Grenon sought to deduct legal fees in connection with determining his child support obligations to his ex-wife. The Tax Court dismissed his appeal. The Federal Court of Appeal similarly rejected his appeal holding that an earlier decision of the Court, Nadeau v. M.N.R., 2003 FCA 400, was dispositive of the issue. In addition the Court rejected Mr. Grenon’s arguments based on section 15 of the Charter.
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Ford Credit Canada v. R. - TCC: Letter from appeals officer did not vacate assessment

Jan 20, 2016 By Bill Innes

Précis: The taxpayer was reassessed on July 9, 2009 for its 2004 and 2005 taxation years. It duly filed notices of objection in a timely manner. After some back and forth the appeals officer wrote to the taxpayer on August 26, 2011 proposing to vacate the 2004 reassessment as part of a settlement offer. After more discussion reassessments were issued on December 19, 2011 for both the 2004 and 2005 taxation years. The taxpayer argued that the December 19, 2011 reassessment of its 2005 taxation year was out of time because of the August 26, 2011 letter had vacated the 2004 reassessment, not reassessed, which meant that the later reassessment of 2005 was not a “consequential” assessment.
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Morrison v. R. - TCC: Appellant in test case not entitled to information about others involved

Jan 18, 2016 By Bill Innes

Précis: The taxpayer’s appeal was one of a number of test cases dealing with donations of pharmaceuticals under tax shelter programs described as the CHT and CGI Donation Programs. In this motion the taxpayer claimed three forms of relief:
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AgraCity Ltd. v. R. - FCA: Crown can have inconsistent pleadings in related appeals

Jan 18, 2016 By Bill Innes

Précis: The Tax Court struck a portion of the Crown’s reply in this case on the basis that it was dealt with transfer pricing while at the same time the Crown argued that there had been no transfer from the non-resident concerned. The Federal Court of Appeal allowed the Crown’s cross-appeal on this point only. The Crown’s cross-appeal on two other points was dismissed. The taxpayer’s appeal arguing that more provisions should have been struck was also dismissed.
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R. v. Schimpf - FC: Taxpayer held in contempt for failure to abide by compliance order

Jan 15, 2016 By Bill Innes

Précis: The taxpayer was held in contempt of a compliance order issued by the Federal Court.
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Levenson v. R. - FC: Judicial review of RRSP over-contribution tax dismissed

Jan 15, 2016 By Bill Innes

Précis: The applicant had formed the habit of filing his tax returns late since he always overpaid his tax. This led to a confusion on the part of CRA as to the amount of his unused RRSP room. The applicant made excess contributions to his spousal RRSP which led to the imposition of tax, penalties and interest. He applied for taxpayer relief which was denied. He brought a judicial review application in the Federal Court. Shortly before trial CRA consented to a judicial review of the interest and penalties.
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Taylor v. R. - TCC: Penalties sustained where claims made for fictitious business losses

Jan 13, 2016 By Bill Innes

Précis: The only issue in this case was the propriety of levying gross negligence penalties where the taxpayer claimed fictitious business losses. As in many prior cases the court sustained the penalties.
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Luschtinetz v. R. - TCC: No tax credits for children living with ex-spouse

Jan 12, 2016 By Bill Innes

Précis: The appellant was required pursuant to a court order to pay support for both his former wife and their children, who resided with the ex-wife. He claimed tax credits in respect of the children which CRA denied. His appeal to the Tax Court was dismissed.
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Blue v. R. - TCC: Annual payments were deductible as spousal support

Jan 11, 2016 By Bill Innes

Précis: Mr. Blue and his ex-wife agreed to her receiving $12,000 per annum for 5 years on the breakup of their marriage. Originally the payments were to be monthly but that was changed to one annual payment of $12,000. When he sought to deduct the first payment in 2013 CRA denied the deduction on the basis that it was not a payment for maintenance but rather a non-deductible capital payment.
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Durocher v. R. - TCC: Option not a nullity - corporation not a CCPC - no capital gains exemption

Jan 11, 2016 By Bill Innes

Précis: The appellants disposed of the shares of Gestion RJCG Inc. ("RJCG") in 2006 and claimed a capital gains exemption in respect of the disposition. CRA denied the exemption on the basis that RJCG was not a "qualified small business corporation shares" as defined by subsection 110.6(1) of the Income Tax Act (the “Act”). CRA concluded that RJCG was controlled by Aviva Canada Inc. ("Aviva"), a public corporation, by virtue of an option agreement throughout the 24 month period preceding the disposition. Thus it was not a Canadian-controlled private corporation (“CCPC) and, as a result, not a qualified small business corporation.
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