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M. Soutar Décor 2000 Ltd. v. R. - TCC: Subsection 160(1) transferee assessment upheld

24 mars 2016 By Bill Innes

Précis: This is an unusual case. The principal of the corporate taxpayer, Michael Soutar, received the help of his father, Ronald Soutar, in 2001 to guarantee a portion of the corporate bank debt. By 2007 the guarantee took the form of a $75,000 GIC deposit. Ronald died in February 2007 and the bank realized on the GIC deposit in June of 2007. Ronald’s estate had an income tax debt at that time in the amount of roughly $20,000 arising from his 2002 and 2005 taxation years. CRA assessed the corporate taxpayer for Ronald’s unpaid tax on the basis that the transfer in 2007 by the bank realization of the GIC deposit was a benefit for the purposes of subsection 160(1) of the Income Tax Act (the “Act”) (i.e., reducing the outstanding corporate bank debt).
M. Soutar Décor 2000 Ltd. v. R. - TCC: Subsection 160(1) transferee assessment upheldPlus >

ACSIS HER Inc. v. R. - TCC: Taxpayer awarded 95% of costs since the date of settlement offer

24 mars 2016 By Bill Innes

Précis: The taxpayer was completely successful after a three day trail in which the taxpayer appealed the disallowance of SRED credits. The taxpayer had made two settlement offers which the Crown treated in a dismissive fashion:
ACSIS HER Inc. v. R. - TCC: Taxpayer awarded 95% of costs since the date of settlement offerPlus >

TDL Group Co. v. R. - FCA: Court of Appeal allows TDL appeal on deduction of interest

23 mars 2016 By Bill Innes

Précis: In a case blogged earlier on this site I reported that the Tax Court denied TDL Group Co. the deduction of interest on a large loan ($234 million) for a period of 7 months in 2002 on the basis that the funds (which were used to purchase shares of a US subsidiary) were ultimately used to advance an interest free loan to Wendy’s International Inc. (“Wendy’s”), the group parent. The loan to Wendy’s was interest free because of concerns about US state taxes and the thin capitalization rule in Canada. Those concerns were resolved and in November of 2002 the loan was restructured to make it interest bearing. CRA allowed the deduction of interest by TDL commencing in November but denied it for the preceding 7 months.
TDL Group Co. v. R. - FCA: Court of Appeal allows TDL appeal on deduction of interestPlus >

Kokanee Placer Ltd. v. R. - TCC: Court sustains penalty for failure to file electronically

23 mars 2016 By Bill Innes

Précis: The Minister imposed a $1,000 penalty upon the taxpayer for failure to file electronically (the taxpayer was a “prescribed corporation” which was required to file electronically under the provisions of the Income Tax Act (the “Act”)). The taxpayer argued that no penalty could be imposed since no tax was payable for that taxation year. The Court rejected this argument and also found that the taxpayer had not successfully raised a due diligence defence.
Kokanee Placer Ltd. v. R. - TCC: Court sustains penalty for failure to file electronicallyPlus >

Beggs v. R. - TCC: No appeal available for denial of waiver request

14 mars 2016 By Bill Innes

Précis: The appellants had applied for a waiver of withholding tax in respect of performances by non-residents. CRA denied the waiver request and the appellant ended up appealing to the Tax Court. The Crown moved to strike the appeals on the basis that the Tax Court did not have jurisdiction to review the refusal to issue a waiver. The Tax Court struck the appeals, holding that it did not have jurisdiction over the matter. There was no order as to costs as these were all informal procedure appeals.
Beggs v. R. - TCC: No appeal available for denial of waiver requestPlus >

Butler v. R. - FCA: Lump sum worker’s compensation award subject to Part I.1 OAS Clawback

14 mars 2016 By Bill Innes

Précis: Mr. Butler received a lump sum worker’s compensation award from the Nova Scotia Workers’ Compensation Board. The Minister assessed the Appellant for repayment of the old age security (“OAS”) in the amount of $3,269.00 on the basis that his income for 2012 under Part I.1 (OAS Clawback) included the payment from the Board. Mr. Butler appealed to the Tax Court where he was unsuccessful. He appealed that decision to the Federal Court of Appeal. The Court dismissed his appeal from the bench. There was no order as to costs.
Butler v. R. - FCA: Lump sum worker’s compensation award subject to Part I.1 OAS ClawbackPlus >

Lamoureux v. R. - TCC: GST gross negligence penalties sustained for carpenter

11 mars 2016 By Bill Innes

Précis: Mr. Lamoureux was a finishing carpenter. For his 2003 and 2004 reporting periods he was assessed for underreported GST. For his 2003 reporting period he was assessed a gross negligence penalty:
Lamoureux v. R. - TCC: GST gross negligence penalties sustained for carpenterPlus >

Commet v. R. - TCC: Tax Court not bound Superior Courts on child tax credits

11 mars 2016 By Bill Innes

Précis: Mr. Commet and his former spouse shared custody of their two children on a 50%/50% basis from 2010 until May of 2013 when their daughter started to live on a full time basis with her mother. Mr. Commet claimed tax credits in respect of his daughter for 2013 and they were denied. He appealed to the Tax Court which rejected his appeal on the basis that the “net” amount of support he paid was not the equivalent of support payments for the children being made by both Mr. Commet and his ex-spouse.
Commet v. R. - TCC: Tax Court not bound Superior Courts on child tax creditsPlus >

Maxi Maid Services (1998) Ltd. v. R. - TCC: No CPP withholdings for CPP pensioner

10 mars 2016 By Bill Innes

Précis: This decision is an early frontrunner for most ridiculous CRA position of 2016. Dora Eytcheson is a home cleaner in her seventies. Her husband died in 2002 and she has received a CPP survivor pension since then. For a number of years she worked for Maxi Maid services which withheld CPP from her salary. In 2009 she turned 65 and applied for her own CPP pension. Shortly thereafter she started receiving a higher monthly cheque which she assumed was a combination of her survivor pension and her own pension. In 2011 she noticed that CPP was still being withheld from her salary so she filed two elections in form CPT30 “Election to Stop Contributing to the Canada Pension Plan or the Revocation of a Prior Election” with CRA and gave a copy to Maxi Maid. Maxi Maid stopped withholding but then in 2013 CRA assessed them for failure to withhold CPP:
Maxi Maid Services (1998) Ltd. v. R. - TCC: No CPP withholdings for CPP pensionerPlus >

SNF L.P. v. R. - TCC: Taxpayer entitled to GST Input Tax Credits where vendor has GST number

10 mars 2016 By Bill Innes

Précis: The question in this appeal was very narrow: [1] The issue in this appeal is whether, or to what extent, a purchaser of goods who pays the required Goods and Services Tax ("GST") under Part IX of the Excise Tax Act ("ETA" or "Act") to a person who is registered as a supplier, but may not be a supplier, is entitled to input tax credits ("ITCs") if the purported supplier, among other things, does not remit the GST to the Receiver General. And if the purchaser in such circumstances is not entitled to ITCs, is it entitled to a rebate of tax paid in error? (Section 261 and subsection 296(2.1) of the ETA.)
SNF L.P. v. R. - TCC: Taxpayer entitled to GST Input Tax Credits where vendor has GST numberPlus >

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