Blogue

Smith v. R. – TCC: Taxpayer could not deduct registered pension plan contributions again other sources of income when his employment income was exempt from tax under section 81 of the Income Tax Act (“ITA”)

12 avril 2018 By Bill Innes

Précis: The taxpayer was a registered Indian and his income as a tribe councillor and head of economic development for the Tlowitsis-Mumtagila First Nation was exempt from tax pursuant to section 81 of the ITA. He sought to deduct contributions of $3,210.00 to a registered pension plan (“RPP”) registered by his employer. The Court held that since his employment income was exempt from tax he could not deduct his RPP contributions against his other sources of income, which did not arise from employment. Thus the appeal was dismissed. There was no order as to costs since this was an informal procedure appeal.
Smith v. R. – TCC: Taxpayer could not deduct registered pension plan contributions again other sources of income when his employment income was exempt from tax under section 81 of the Income Tax Act (“ITA”)Plus >

Humane Society of Canada Foundation v. R. – FCA: Application for production of documents based on alleged bias and lack of procedural fairness dismissed with costs

11 avril 2018 By Bill Innes

Précis: The appellant brought a motion to compel the production of additional documents by the Crown based on allegations of bias and absence of procedural fairness. Justice Webb found that the allegations were unsupported by evidence and dismissed the application with costs in any event of the cause.
Humane Society of Canada Foundation v. R. – FCA: Application for production of documents based on alleged bias and lack of procedural fairness dismissed with costsPlus >

Westsource Group Holdings v. R. – FCA: Failure to provide prescribed information fatal to SRED claims

10 avril 2018 By Bill Innes

Précis: CRA denied the taxpayer certain SRED expenditures claimed on the basis that it had not properly completed all of the information required on a prescribed form. The taxpayer appealed unsuccessfully to the Tax Court. The taxpayer appealed further to the Federal Court of Appeal and its appeal was dismissed from the bench, with costs.
Westsource Group Holdings v. R. – FCA: Failure to provide prescribed information fatal to SRED claimsPlus >

Onenergy Inc. v. R. – FCA: HST/GST Issue - Legal expenses incurred to sue former executives generated ITC’s

6 avril 2018 By Bill Innes

Précis: The taxpayer (formerly known as Look Communications Inc. and sometimes referred to in the decision as “Look”) commenced proceedings to recover $14,700,000 in what were alleged to be excessive payments made to former executives. The proceedings were commenced after it terminated its telecommunications business and was no longer making taxable supplies. The sole issue before the tax court was whether subparagraph 141.1(3)(a) of the Excise Tax Act (the “Act”) deemed the litigation costs to have been incurred in the course of a commercial activity. The question was posed to the Tax Court in an application under Rule 58 of the Tax Court of Canada Rules (General Procedure) (“Rule 58”). The Tax Court answered in the negative and the taxpayer appealed to the Federal Court of Appeal. The Federal Court of Appeal held that there was a direct connection between the sale and winding up of the taxpayer’s business and the litigation expenses. As a result the appeal was allowed with costs since the Tax Court should have answered the question posed in the affirmative.
Onenergy Inc. v. R. – FCA: HST/GST Issue - Legal expenses incurred to sue former executives generated ITC’sPlus >

Dirani v. R. – FCA: FCA sets aside Tax Court decision where Crown admits prior counsel misinformed the Tax Court

5 avril 2018 By Bill Innes

Précis: While it is not entirely clear from the decision it appears that the Tax Court dismissed Mr. Dirani’s appeal where he did not appear pursuant to a Notice of Hearing. He moved unsuccessfully to set aside that decision. Mr. Dirani appealed that decision to the Federal Court of Appeal where the new Crown counsel informed the Court of Appeal that prior Crown counsel had misinformed the Tax Court that Mr. Dirani was “refusing to accept registered mail.” Accordingly the Court of Appeal set aside the decision of the Tax Court in an opinion rendered from the bench. They ordered that Mr. Dirani’s application remitted to the Tax Court for “determination on a full and complete record” [para. [3]]. There was no order as to costs.
Dirani v. R. – FCA: FCA sets aside Tax Court decision where Crown admits prior counsel misinformed the Tax CourtPlus >

Ahlul-Bayt Centre, Ottawa v. R. – FCA: Applicant adduced insufficient evidence of irreparable harm to merit injunctive relief

4 avril 2018 By Bill Innes

Précis: The Centre is a registered charity operating an Islamic school in Ottawa. CRA gave notice of its intention to revoke the Centre’s charitable status. The Centre applied pursuant to paragraph 168(2)(b) of the Income Tax Act and rule 300(b) of the Federal Courts Rules, SOR/98-106 for an order staying that decision. The Federal Court of Appeal applied the test for injunctive relief found in RJR-MacDonald Inc. v. Canada (Attorney General) [1994] 1 SCR 311, 1994 CanLII 117 (SCC) (“the RJR test”). The Court held that the Centre had not met the second prong of the RJR test, i.e., evidence of irreparable harm. Accordingly the application was dismissed from the bench with costs.
Ahlul-Bayt Centre, Ottawa v. R. – FCA: Applicant adduced insufficient evidence of irreparable harm to merit injunctive reliefPlus >

Bauer v. R. – FCA: FCA rejects Charter challenge in Tax Court of documents obtained by requirements during criminal investigation

3 avril 2018 By Bill Innes

Précis: In the Tax Court the taxpayer unsuccessfully sought to strike portions of the Reply that related to documents acquired by the Crown pursuant to requirements. The requirements had been issued by the same CRA investigator who was investigating the taxpayer for possible criminal offences under the Income Tax Act. The taxpayer appealed to the Federal Court of Appeal which dismissed his appeal holding that “it is plain and obvious that the CRA’s power to issue requirements under section 231.2 of the ITA to obtain information or documents that will be used for the administrative purpose of reassessing a taxpayer is not suspended by the commencement of an investigation” [para. [17]]. The appeal was dismissed with costs.
Bauer v. R. – FCA: FCA rejects Charter challenge in Tax Court of documents obtained by requirements during criminal investigationPlus >

Peck v. R. – TCC: Gross negligence penalties upheld in another Fiscal Arbitrators case

2 avril 2018 By Bill Innes

Précis: Mr. Peck claimed a business loss of $342,682.13 in 2009 which he used to reduce his 2009 income to nil and carried the balance back to 2008, 2007 and 2006. CRA denied the losses and imposed a gross negligence penalty of $52,852.98. This was a Fiscal Arbitrators case. Mr. Peck sought to vacate the penalty. The Court dismissed the appeal with costs holding that Mr. Peck met the standard of gross negligence.
Peck v. R. – TCC: Gross negligence penalties upheld in another Fiscal Arbitrators casePlus >

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

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 >

Fox v. R. – TCC: Tax Court rejects director’s “due diligence” defence

26 mars 2018 By Bill Innes

Précis: The taxpayer was assessed as a director for unpaid source deductions and GST. The taxpayer, who was self-represented, argued that he had met the “due diligence” standard in attempting to keep the corporation’s remittances current. The Court did not accept his arguments, finding that he had failed to meet the “stricter standard” the Federal Court of Appeal had propounded in the case of R. v. Buckingham, 2011 FCA 142. As a result the appeals were dismissed. There was no order as to costs since these were all informal procedure appeals.
Fox v. R. – TCC: Tax Court rejects director’s “due diligence” defencePlus >

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