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CBS Canada Holdings Co. v. R. - FCA: Affidavit tendered on motion not hearsay evidence - appeal allowed

24 avril 2017 By Bill Innes

Précis: The taxpayer filed an affidavit by a Ms. Toaze, a lawyer for the taxpayer (not a lawyer acting as counsel in the proceedings but a member of the same firm), in a motion to enforce a settlement agreement with CRA. The Crown moved to strike the affidavit. The Tax Court Judge held that the affidavit was hearsay and exercised her discretion to exclude it. The taxpayer appealed to the Federal Court of Appeal. The Court of Appeal held that the Tax Court Judge erred in excluding the affidavit and allowed the appeal with costs both in the Court of Appeal and in the Tax Court.
CBS Canada Holdings Co. v. R. - FCA: Affidavit tendered on motion not hearsay evidence - appeal allowedPlus >

Dicosmo v. R. - FCA: Taxpayer’s failure to plead statute-barring fatal to his appeal

21 avril 2017 By Bill Innes

Précis: The taxpayer appealed from a decision of the Tax Court denying him certain employment expenses and not permitting him to raise a defence of statute-barring which he had not pleaded (two other grounds of appeal were abandoned). The Federal Court of Appeal found the he had not demonstrated any reviewable error on the denial of employment expenses. With respect to statute-barring, the law was clear: it had to be pleaded. As a result the appeal was dismissed from the bench with costs.
Dicosmo v. R. - FCA: Taxpayer’s failure to plead statute-barring fatal to his appealPlus >

Coathup v. R. - TCC: director at music school was an employee

21 avril 2017 By Bill Innes

Précis: The appellant hired Ms. Grace Pham Vanstone to run music programs for students at two locations operated by the appellant. The sole issue was whether Ms. Vanstone was an employee or an independent contractor. The Court found that there was no common intention between the appellant and Ms. Vanstone as to her status. The Court weighed all of the pertinent factors from the jurisprudence and concluded that Ms. Vanstone was an employee. Thus CRA’s decision was confirmed.
Coathup v. R. - TCC: director at music school was an employeePlus >

Biles Estate v. R. - FC: Court refuses order of mandamus to compel CRA to comply with alleged agreement

20 avril 2017 By Bill Innes

Précis: This decision involved two applications for judicial review by the same taxpayer. They were heard together. The taxpayer sought an order of mandamus to compel CRA to comply with the terms of an alleged agreement (the “Proposal”) to settle a tax dispute. The Federal Court found that the taxpayer had failed to demonstrate that there in fact was any enforceable agreement with respect to the Proposal. In any event CRA’s conduct was not unreasonable under the circumstances. Both applications were dismissed with costs.
Biles Estate v. R. - FC: Court refuses order of mandamus to compel CRA to comply with alleged agreementPlus >

Ike Enterpreises Inc. v. R. - TCC: Ginger and granola were food stuffs not snacks and therefore GST/HST exempt

20 avril 2017 By Bill Innes

Précis: The taxpayer manufactured various food products. CRA took the position that three of them were subject to GST/HST and not exempt supplies: ginger, granola and “sticks” (made of wheat, rice and spelt). The Tax Court found that the ginger and granola were, on the evidence, groceries and therefore exempt supplies. The “sticks” were found to be a snack product and therefore not an exempt supply. The taxpayer was entitled to costs since it succeeded on 2 of the 3 disputed items; failing an agreement as to the amount of costs the parties were given 60 days to make submissions on costs.
Ike Enterpreises Inc. v. R. - TCC: Ginger and granola were food stuffs not snacks and therefore GST/HST exemptPlus >

Struck v. R. - FCA: Taxpayer cannot appeal a consent judgment

17 avril 2017 By Bill Innes

Précis: Mr. Struck was assessed in respect of the disposition of shares and real property to his son. He appealed to the Tax Court. Subsequently he entered a settlement with the Crown which specified the amounts of both the gain on the disposition of the shares and the real property. His appeal to the Federal Court of Appeal was ultimately confined to his allegation that he was entitled to a reserve on the disposition of real property under section 40 which was not allowed on the consent judgment. The Court of Appeal held that he was not entitled to appeal from the consent judgment where he had agreed on the amount of the gain on the real property and had not claimed any amount for a reserve on that settlement. As a result the appeal was dismissed with costs.
Struck v. R. - FCA: Taxpayer cannot appeal a consent judgmentPlus >

BP Canada Energy v. R - FCC: CRA not entitled to internal tax accrual working papers (TAWPs)

3 avril 2017 By Bill Innes

Précis: The Federal Court of Appeal has reversed the Federal Court’s decision that held that corporate taxpayers can be required to produce their internal tax accrual working papers (“TAMPs”). This may be one of the most important cases in several years on the extent of the power CRA has in gathering private tax information compiled by Canadian businesses. The Chief Justice of the Federal Court of Appeal, who is a noted tax expert, has written an intellectually compelling decision. If the Supreme Court grants leave to appeal, which I think highly likely, it is difficult to predict what the Court will do.
BP Canada Energy v. R - FCC: CRA not entitled to internal tax accrual working papers (TAWPs)Plus >

Nestlé Canada v. R. - No ITCs for GST/HST purposes on imaginary coupons

29 mars 2017 By Bill Innes

Précis: The taxpayer claimed ITCs for GST/HST purposes on what it termed “instant rebate coupons” for its products sold at Costco. The problem was that it did not issue any coupons, either in paper form or in electronic form. Costco just automatically applied a discount to the products when they were purchased. CRA denied the ITCs on the basis that the discount was not a coupon but a promotional allowance under section 232.1 of the Excise Tax Act. The taxpayer appealed. Associate Chief Justice Lamarre reached the somewhat inevitable conclusion that without coupons the taxpayer had no case. The appeal was dismissed with costs.
Nestlé Canada v. R. - No ITCs for GST/HST purposes on imaginary couponsPlus >

Aeronautic Development Co. v. R - TCC: Taxpayer controlled de facto by non-resident - no ITCs for SRED

24 mars 2017 By Bill Innes

Précis: The taxpayer claimed refundable SRED investment tax credits (ITCs) in 2009, 2010 and 2011 in connection with the prototyping and certification of an amphibious aircraft known as the Seawind. CRA denied the ITCs on the basis that the taxpayer was under the de facto control of Mr. Richard Silva, who is a non-resident of Canada. Shortly prior to trial CRA added a new argument based on an allegation that the taxpayer was under the de jure control of Seawind Development Corporation (“Seawind Corp.”), a corporation legally controlled by Mr. Silva. The Court rejected the de jure control argument both because it was pleaded too late and on the evidence adduced.
Aeronautic Development Co. v. R - TCC: Taxpayer controlled de facto by non-resident - no ITCs for SREDPlus >

Peach v. R. - TCC: Taxpayer allowed modest business expenses upon reconsideration after FCA appeal

24 mars 2017 By Bill Innes

Précis: At trial Justice Bocock dismissed the taxpayer’s appeal both on the issue of rental losses and expenses from a financial consulting business. That decision was sustained in the Federal Court of Appeal on the issue of rental losses but reversed on the consulting business and remitted back to the Tax Court for a determination of the reasonableness of the expenses claimed. Justice Bocock made that determination on the basis of the trial record and additional submissions of the parties. He allowed somewhat less than half of the amounts at issue. Costs were awarded to Mr. Peach on the informal procedure Tariff, subject to the right of the parties to make further submissions within 30 days.
Peach v. R. - TCC: Taxpayer allowed modest business expenses upon reconsideration after FCA appealPlus >

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