Blogue

McKay v. R. - TCC: Subsection 160(1) assessment sustained based on common law relationship

27 octobre 2016 By Bill Innes

Précis: The appellant was assessed pursuant to subsection 160(1) of the Income Tax Act with respect to the transfer of a 2008 Cadillac Escalade to her by Mr. Henry Wetelainen. The sole question before the Court was whether the taxpayer and Mr. Wetelainen were in a common law relationship that would be subject to the provisions of subsection 160(1). After a lengthy review of the facts and the law the Court concluded that they were in a common law relationship and dismissed the taxpayer’s appeal with costs to CRA.
McKay v. R. - TCC: Subsection 160(1) assessment sustained based on common law relationshipPlus >

ONEnergy Inc. v. R. - TCC: No ITCs for legal fees incurred 2 years after sale of business

27 octobre 2016 By Bill Innes

Précis: The taxpayer, formerly known as Look Communications Inc. (“Look”), sold its business in 2009 (the “Spectrum Sale”). In 2011 it commenced action against its former directors to recover roughly $15 million in payments made to them for “equity cancellation” and as bonuses. Look claimed ITCs on the legal fees in connection with the litigation. CRA denied the ITCs on the basis that the legal fees were not incurred “in the course of a commercial activity pursuant to subparagraph 141.1(3)(a) of the Excise Tax Act” ( the “Act”). The point came before the Tax Court on an application under Rule 58 of the Tax Court of Canada (General Procedure) Rules.
ONEnergy Inc. v. R. - TCC: No ITCs for legal fees incurred 2 years after sale of businessPlus >

Whissell v. R. - FCA: Taxpayer fails in appeal of non-filing penalties

26 octobre 2016 By Bill Innes

Précis: This was an appeal from decisions of the Tax Court blogged earlier on this site. Mr. Whissell was assessed for 2006, 2007, 2008, 2009 and 2010 in respect of unreported income. He was assessed non-filing penalties under subsection 163(1) for each of 2007, 2008, 2009 and 2010. The sole issue before the Tax Court was the imposition of these penalties. The Court held that he had not made out a due diligence defence.
Whissell v. R. - FCA: Taxpayer fails in appeal of non-filing penaltiesPlus >

Mazo v. R. - TCC: Taxpayer taxed on income from pyramid scheme, entitled to deduct costs

26 octobre 2016 By Bill Innes

Précis: The Taxpayer participated in a pyramid scheme known as Business In Motion International Corporation (“BIMIC”) in 2007, 2008 and 2009. She received proceeds of roughly $90,000 in those years which CRA added to her income and imposed gross negligence penalties. The taxpayer appealed to the Tax Court. The Tax Court concluded that the proceeds were in fact taxable but concluded that the taxpayer should be allowed a deduction for her costs of buying into the scheme. The gross negligence penalties were sustained.
Mazo v. R. - TCC: Taxpayer taxed on income from pyramid scheme, entitled to deduct costsPlus >

Purba v. R. - TCC: Charitable receipts rejected - taxpayer’s evidence unreliable

25 octobre 2016 By Bill Innes

Précis: The taxpayer claimed cash charitable donations of roughly $10,000 in 2005 (approximately 25% of his after-tax income) to Christ Apostolic Church International Miracle Centre (“Miracle”) (he also claimed a donation of $21 to another charity). The Court found that the evidence presented by the taxpayer was unreliable and dismissed his appeal. There was no order as to costs since this was an informal procedure appeal.
Purba v. R. - TCC: Charitable receipts rejected - taxpayer’s evidence unreliablePlus >

Judickas v. R. - TCC: Taxpayer entitled to Canada Child Tax Credits - both parents paid support

25 octobre 2016 By Bill Innes

Précis: CRA denied the taxpayer Canada Child Tax Credits in 2009 and 2010. The Taxpayer established that both he and his former wife were paying support. He paid her for four children in her custody and she paid him for two children in his custody. There was no set-off. The Court accepted his evidence and allowed his appeal. There was no order as to costs as this was an informal procedure appeal.
Judickas v. R. - TCC: Taxpayer entitled to Canada Child Tax Credits - both parents paid supportPlus >

Perry v. R. - TCC: Court rejects dubious charitable donation receipts

19 octobre 2016 By Bill Innes

Précis: In 2005 and 2006 the taxpayer claimed large (as a proportion of his income) charitable donations to a charity that was de-registered in 2007. The Court found the taxpayer’s evidence unacceptable and self-contradictory. The receipts at issue were at odds with the taxpayer’s testimony and otherwise deficient. The appeal was dismissed. There was no order as to costs as this was an informal procedure appeal.
Perry v. R. - TCC: Court rejects dubious charitable donation receiptsPlus >

Hall v. R. - TCC: No limitation period on excess RRSP contributions where no return filed

17 octobre 2016 By Bill Innes

Précis: The taxpayer had over-contributed to his RRSP in the amount of $12,029 by the end of 2008. The Minister subsequently assessed the taxpayer tax, interest and penalties for 2008 to 2013 under Part X.1 of the Act in respect of the over-contributions. At trial CRA waived the penalties. The taxpayer argued unsuccessfully that the 2008 to 2011 years were statute-barred. The Court found that the limitation period under Part X.1 of the Act did not run until the taxpayer filed a return in respect of the over-contributions.
Hall v. R. - TCC: No limitation period on excess RRSP contributions where no return filedPlus >

Carpenter v. R. - TCC: Taxpayer out of time for extension of time to file Notice of Appeal

17 octobre 2016 By Bill Innes

Précis: The taxpayer failed to file returns for 1999 to 2002. In 2004 she was assessed for each of those years and did not file a notice of objection. In 2013 she filed returns for 1999-2012. The 2003-2012 returns were assessed as filed but the 1999-2002 returns were returned to her and not further assessed. She filed a notice of objection in 2013 to the years 1999 to 2012. On March 3, 2015 CRA confirmed its position. On May 9, 2016 the taxpayer filed an application to extend the time to file a Notice of Appeal but it was not perfected (by inclusion of a draft Notice of Appeal) until June 7, 2016.
Carpenter v. R. - TCC: Taxpayer out of time for extension of time to file Notice of AppealPlus >

2087028 Ontario Inc. v. R. - TCC: Bank transfers from relatives not unreported business income

7 octobre 2016 By Bill Innes

Précis: The taxpayer was owned by Ms. Lin and operated an immigration consulting business for Chinese immigrants. It was reassessed for its 2012 and 2013 taxation years by adding alleged unreported income of $84,966 and $95,770. That income represented 6 bank transfers to Ms. Lin by various members of her family. The Crown alleged that the bank transfers were disguised income from the immigration business of 2087028 Ontario Inc. The Court heard evidence from Ms. Lin and her family members who had transferred the funds.
2087028 Ontario Inc. v. R. - TCC: Bank transfers from relatives not unreported business incomePlus >

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