Coast Capital Savings Credit Union v. R. - TCC: Taxpayer cannot plead “sham”

Aug 31, 2015 By Bill Innes

Précis: The taxpayer was the unknowing victim of an RRSP strip scheme. The annuitants set up self-administered RRSPs with the taxpayer and then directed the taxpayer to use the funds in the RRSP to purchase the shares of a Canadian corporation from a third party. The promoters of the scheme then transferred the purchase money offshore into vehicles to which the annuitants had access but, theoretically, in which they had no ownership interest.
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C.J. McCarty Inc. v. R. - TCC: Taxpayer was not an incorporated employee

Aug 31, 2015 By Bill Innes

Précis: Bruce McCarty was the principal of C.J. McCarty Inc. (“CJ”) which provided construction management services on large construction projects. Mr. McCarty had more than 35 years experience in the industry. In 2007 and 2008 CJ provided construction management services to MEG Energy Corp. (“MEG”) in connection with the construction of refinery facilities at Christina Lake, British Columbia. CRA took the position that CJ was a “personal services business”, e.g., that Mr. McCarty was an “incorporated employee”.
C.J. McCarty Inc. v. R. - TCC: Taxpayer was not an incorporated employeeREAD MORE »

Remtilla v. R. - TCC: T1 Adjustment Requests operated as waivers of statute-barred years

Aug 28, 2015 By Bill Innes

Précis: The taxpayer (a tax accountant) and his wife traded securities through a brokerage account. In 2005, 2006 and 2007 they treated their gains and losses as being on capital account. In 2008 they had large losses (roughly $500,000 each). In filing their 2008 returns they claimed their losses as business losses. They also filed T1 Adjustment Requests to have their 2005, 2006 and 2007 gains and losses treated as being from business. They entered into a settlement with CRA in 2012 under the terms of which they were given business loss treatment in 2008. However after the settlement was reached they objected to the reassessment of their gains in 2006 and 2007 as being on income account.
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Rossi v. R. - TCC: Court dismisses appeal filed four years late

Aug 27, 2015 By Bill Innes

Précis: Mr. Rossi was reassessed for 2003 in 2006; he filed a notice of objection in a timely manner. In 2010 CRA confirmed the 2003 reassessment by letter sent to Mr. Rossi by registered mail with a copy by first class mail to his accountant. When the letter sent to Mr. Rossi was returned to CRA unclaimed, it sent the letter to Mr. Rossi again, this time by first class mail, also in 2010. Mr. Rossi and his accountant claimed that in reviewing his account with CRA it was not clear that the 2003 reassessment had been confirmed. In 2014 Mr. Rossi filed a notice of appeal in the Tax Court and CRA moved to have it dismissed.
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Basic v. R. - TCC: Taxpayer denied deduction of most home office expenses

Aug 27, 2015 By Bill Innes

Précis: Mr. Basic operated an aluminum siding business from his home. He was reassessed for 2007 denying roughly $50,000 of the expenses he claimed. He was also assessed for unremitted GST. The two appeals were heard together.
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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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Gleig v. R. - TCC: Taxpayers denied deductions for unregistered tax shelter

Aug 24, 2015 By Bill Innes

Précis: Mr. Gleig and other appellants purchased interests in a mineral claim with a 25% up front payment. They claimed Canadian Resource Expenditures (“CRE”) on the full agreed price. CRA denied their claim on the basis that the program was an unregistered tax shelter or, in the alternative, a sham.
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Fettes v. R. - TCC: Decrease in strike price disentitled taxpayer to stock option tax deduction

Aug 24, 2015 By Bill Innes

Précis: Mr. Fettes was an employee of the Culligan Group and in 2004 he was granted an option to acquire shares of Culligan Ltd. at $10.00 each, the then fair market value of the shares. In 2008 he exercised his option but the strike price was reduced to $2.02 for some reason. This was below the then fair market value of $8.05. The Minister assessed a benefit on the difference between $8.05 and $2.02. Mr. Fettes appealed on the basis that he was entitled to a reduction of 50% of the amount of the benefit as a result of the application of paragraph 110.1(1)(d) of the Income Tax Act (the “Act”).
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Public Television Association of Quebec v. R. - FCA: No charitable status for sibling of US TV channel

Aug 21, 2015 By Bill Innes

Précis: Public Television Association of Quebec (“PTAQ”) appealed from the Minister’s revocation of its charitable status. The revocation was based on the Minister’s conclusion that PTAQ was not using all of its assets in its own charitable activities. Essentially the Minister argued that PTAQ was a creature of Vermont Public Television (“VPT”). In the alternative the Minister alleged that PTAQ was making gifts to VPT which was not a “qualified done” for the purposes of the Income Tax Act.
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Glover v. R. - TCC: Taxpayer denied cash portion of donation in leveraged donation scheme

Aug 20, 2015 By Bill Innes

Précis: The taxpayer participated in a leveraged donation scheme. In the Tax Court he did not pursue a claim for the donation of the software licences which he allegedly donated to a registered charity. His claim was restricted to the cash portion of his donation.
Glover v. R. - TCC: Taxpayer denied cash portion of donation in leveraged donation schemeREAD MORE »

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