Archives - mars 2018

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  Drazin-Bendheim v. R. – TCC: Tax Court invokes “fresh step” rule and declines to strike portions of Crown’s Reply

  28 mars 2018 By Bill Innes

  catégories:

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

  Précis: The taxpayer sought to strike those portions of the Crown’s reply that alleged she had failed to report a gain on the disposition of property in 2005 and in so doing made a misrepresentation attributable to neglect, carelessness or willful default. The taxpayer argued that misrepresentation was not raised during the assessment or objection process and those portions of the pleading should be struck on the basis that they may prejudice or delay the fair hearing of the appeal, are scandalous, frivolous or vexatious, or are otherwise an abuse of process of the Court. The Court denied the taxpayer’s motion on the basis that the motion was brought after the close of pleadings and after the taxpayer had agreed to a timetable Order. In so doing the Court relied upon Section 8 of the Tax Court of Canada Rules (General Procedure) (the “Rules) which provide, in part, that a party cannot, without the leave of the Court, attack a document based on an irregularity where the moving party has taken a fresh step in the proceeding after the impugned document was filed. In an evident expression of the Court’s displeasure the motion was dismissed with costs to the Crown in any event of the cause.
  Drazin-Bendheim v. R. – TCC: Tax Court invokes “fresh step” rule and declines to strike portions of Crown’s ReplyPlus >
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  Iggillis Holdings v. R. – FCA: FCA upholds advisory “common interest privilege” in tax planning

  21 mars 2018 By Bill Innes

  catégories:

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

  Précis: This is an appeal from a decision of the Federal Court which held that advisory common interest privilege was not a valid constituent form of solicitor-client privilege and accordingly allowed CRA’s application for the production by Iggillis Holdings of a document known as the “Abacus Memo” which had been produced by a lawyer for a third party and shared with Iggillis during the course of a purchase and sale transaction. The Federal Court of Appeal reversed this decision holding that the Abacus Memo was protected from disclosure by solicitor-client privilege. Thus the appeal was allowed and CRA’s application for production of the Memo was dismissed. The appellants were awarded costs both in the Federal Court and the Federal Court of Appeal.
  Iggillis Holdings v. R. – FCA: FCA upholds advisory “common interest privilege” in tax planningPlus >
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  Grubner v. R. – TCC: No ABILs for directors paying unremitted corporate GST/HST and source deductions

  20 mars 2018 By Bill Innes

  catégories:

  • Corporate Tax
  • Federal Income Tax
  • Personal Tax, Estate & Wealth Planning

  Précis: The Grubner brothers claimed allowable business investment losses (ABILs) in 2012 in respect of $606,000 they had paid directly to CRA in connection with unremitted GST/HST and sources deductions of Bavara Auto Haus Inc. (“Bavara”), a corporation of which they were both directors. Justice Boyle held that there was no evidence that the Grubners acquired a debt or other obligation of Bavara for the purpose of earning income. As a result the two appeals were dismissed with costs.
  Grubner v. R. – TCC: No ABILs for directors paying unremitted corporate GST/HST and source deductionsPlus >
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  Hughes v. R. – TCC: Another Tax Court decision upholding a disability tax credit for phenylketonuria (“PKU”)

  16 mars 2018 By Bill Innes

  catégories:

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

  Précis: PKU is an incurable lifelong condition which if left untreated can cause a child to suffer permanent severe brain damage. CRA denied Ms. Hughes the disability tax credit for her 15 year old daughter. Ms. Hughes appealed to the Tax Court which allowed her appeal following the example of Justice Jorré in Mullings (reported earlier on this site).
  Hughes v. R. – TCC: Another Tax Court decision upholding a disability tax credit for phenylketonuria (“PKU”)Plus >
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  Akanda Innovation v. R. – TCC: Motion to set aside judgment of dismissal denied

  16 mars 2018 By Bill Innes

  catégories:

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

  Précis: The taxpayer’s appeal was dismissed when it failed to send a representative to attend a status hearing. The dismissal came after a somewhat involved history of non-compliance by the taxpayer. The taxpayer retained new counsel who moved to extend the time to file a motion to set aside the judgment of dismissal and, if successful, to set aside the judgment of dismissal. Chief Justice Rossiter dismissed the application in view of the prejudice to the Crown and the absence of a credible explanation of the taxpayer’s preceding delay. There was no order as to costs.
  Akanda Innovation v. R. – TCC: Motion to set aside judgment of dismissal deniedPlus >
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  Lehigh Hanson Materials Limited v. R. – TCC: Court rejects Rule 58(1) application for complex SRED issues

  15 mars 2018 By Bill Innes

  catégories:

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

  Précis: In a rather odd application the taxpayer wanted a ruling under Rule 58(1) on whether the character of research it conducted was affected by similar research done by its competitors. Not surprisingly the Tax Court declined jurisdiction leaving the matter to the trial judge who would have a greater command of the underlying facts once the evidence was adduced.
  Lehigh Hanson Materials Limited v. R. – TCC: Court rejects Rule 58(1) application for complex SRED issuesPlus >
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  DiLalla v. R. – FCA: Decision that production requests overly broad and vague did not disclose reviewable error

  13 mars 2018 By Bill Innes

  catégories:

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

  Précis: At discovery Mr. DiLalla had asked for three kinds of documents from the Crown, all of which were refused: (1) all policies and interpretations of the Canada Revenue Agency that mention or are in relation to personal endeavours and hobbies, (2) all such documents relating to gross negligence penalties, and (3) Canada Revenue Agency’s policies as to whether a net worth audit should be completed. He appealed that refusal to the Tax Court which declined to order their production on the basis that the requests were overly broad and vague. He appealed the first two categories to the Federal Court of Appeal which dismissed the appeal, with costs, as not disclosing a reviewable error.
  DiLalla v. R. – FCA: Decision that production requests overly broad and vague did not disclose reviewable errorPlus >
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  Nagel v. R. – TCC: No appeal from a nil assessment

  12 mars 2018 By Bill Innes

  catégories:

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

  Précis: Ms. Nagel was reassessed in February of 2016 for her 2013 taxation year. The reassessment was a nil assessment and showed her as resident in Saskatchewan. In November of 2016 she was again reassessed for 2013. The second reassessment was also a nil assessment and this time showed her as a resident of Nova Scotia. Ms. Nagel applied to the Tax Court for an extension of time to file a Notice of Appeal. The application was denied since there is no appeal from a nil assessment. There was no order as to costs.
  Nagel v. R. – TCC: No appeal from a nil assessmentPlus >
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  VLN Advanced Technologies v. R. – TCC: No SRED allowed for purchased capital equipment

  9 mars 2018 By Bill Innes

  catégories:

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

  Précis: In its taxation year ended December 31, 2012 the taxpayer claimed the amount of $453,323 as a scientific research and experimental development (“SRED”) capital expenditure. The expenditure represented the purchase price of “automated Pure Pulse Waterjet System equipment” from Pratt and Whiney Military Aftermarket Services Inc. (“Pratt”). As part of the purchase agreement the taxpayer agreed to provide $450,000 of research and engineering services to Pratt using the equipment. CRA denied the SRED claim on the basis that the property was not purchased to be used for all or substantially all of its operating time for the prosecution of SRED in Canada. CRA’s position was that the property was acquired to provide services to Pratt and others as an R&D subcontract provider. On the evidence the Court accepted CRA’s position and dismissed the appeal with costs.
  VLN Advanced Technologies v. R. – TCC: No SRED allowed for purchased capital equipmentPlus >
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  DaCosta v. R. – TCC: Gross negligence penalties set aside for one of two taxpayers in property “flips”

  7 mars 2018 By Bill Innes

  catégories:

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

  Précis: In 2006 Cynthia DaCosta, a real estate agent, arranged to purchase two condos, one in her own name and one in the name of her 17 year old granddaughter. The sales closed in 2010. Cynthia sold her granddaughter’s condo one month later and her condo two months later, each at a profit of roughly $100,000. Neither reported any income from the sales. CRA assessed the sales as being on income account and imposed gross negligence penalties. The Tax Court dismissed Cynthia’s appeal, with costs, but allowed her granddaughter’s appeal, without costs, to the extent of vacating the gross negligence penalties.
  DaCosta v. R. – TCC: Gross negligence penalties set aside for one of two taxpayers in property “flips”Plus >