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Atlantic Thermal Star v. R. - TCC: Deductions for a bad debt and goodwill denied, costs denied

2 août 2016 By Bill Innes

Précis: The taxpayer claimed a bad debt deduction in 2008 ($14,919) and a CEE deduction in 2010 ($4,996). It also claimed costs on the basis of alleged delay by the Minister. The taxpayer’s principal (Mr. Backman) did not testify; its case was put in entirely by its accountant. The Court rejected the appeal essentially on the basis that there was no evidence to demolish the Minister’s pleaded assumptions. Moreover there was no order as to costs (this was an informal procedure appeal).
Atlantic Thermal Star v. R. - TCC: Deductions for a bad debt and goodwill denied, costs deniedPlus >

AFD Petroleum v. R. - FCt: Minister did not act unreasonably in refusing to accept incomplete SRED form

29 juillet 2016 By Bill Innes

Précis: The applicant submitted a form for SRED credits to CRA. The claim was rejected because the form was not completed properly. The applicant applied to the Federal Court to review the decision of CRA. The application was dismissed; the Court found that the decision did not involve procedural unfairness. Costs were awarded to CRA.
AFD Petroleum v. R. - FCt: Minister did not act unreasonably in refusing to accept incomplete SRED formPlus >

Thibeault v. R. - TCC: Taxpayer not engaged in a vessel leasing business in 2008 and 2010

29 juillet 2016 By Bill Innes

Précis: The taxpayer had a number of business interests including vessels and marine permits which he held personally. In 2008 he leased one vessel and offset the rental income with a large capital cost allowance claim which resulted in a loss for tax purposes. In 2010 he sold one of his permits and against claimed capital cost allowance against the sale proceeds. CRA limited his capital cost allowance pursuant to Regulation 1100(15) to the amount of his rental income. The taxpayer argued that he was engaged in a vessel leasing business in both taxation years with the result that Regulation 1100(15) did not operated to limit his capital cost allowance claims in either year. The Tax Court found that the taxpayer was not engaged in a vessel leasing business in either taxation year and dismissed the appeal with costs.
Thibeault v. R. - TCC: Taxpayer not engaged in a vessel leasing business in 2008 and 2010Plus >

Canada v. 0741449 BC - FCt: Jeopardy orders granted; corporate principal had chequered financial past

28 juillet 2016 By Bill Innes

Précis: This decision deals with the rather rare jeopardy order provision found in subsection 164 (1.2) of the Income Tax Act (this is only the third reported decision on the provision). Subsection 164(1.2) permits the Minister, with the sanction of the Court, to retain taxpayer funds in her possession that would otherwise be payable to the taxpayer where a jeopardy situation is shown to exist. The Court found that the evidence disclosed both little, if any, other assets of the respondent corporation and a history of non-payment or bankruptcy on the part of the corporate principal. As a result the jeopardy orders sought were granted. The Minister was awarded costs set at $5,000.
Canada v. 0741449 BC - FCt: Jeopardy orders granted; corporate principal had chequered financial pastPlus >

K.M. Construction v. R. - TCC: Minister can rely upon municipal valuation in property transfer case

28 juillet 2016 By Bill Innes

Précis: The taxpayer corporation transferred a property to its principal shareholder in 2010 for $510,000 which $65,000 less than the 2009 Montreal property tax assessment ($575,000) for the property. The taxpayer was assessed GST based on the high valuation. The Tax Court reviewed the evidence and concluded that the taxpayer had not met the onus of demolishing the assumption of the Minister as to the value of the property. The appeal was accordingly dismissed. There was no order as to costs since this was an informal procedure appeal.
K.M. Construction v. R. - TCC: Minister can rely upon municipal valuation in property transfer casePlus >

Whissell v. R. - TCC: Taxpayer failed to make out due diligence defence for non-filing penalties

27 juillet 2016 By Bill Innes

Précis: Mr. Whissell was assessed for 2006, 2007, 2008, 2009 and 2010 in respect of unreported income. He was assessed 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. All of the appeals with the exception of 2006 were dismissed with costs. The 2006 appeal was allowed, without costs, only to the extent of recognizing a charitable donation of $150 which was conceded by the Crown.
Whissell v. R. - TCC: Taxpayer failed to make out due diligence defence for non-filing penaltiesPlus >

Crete v. R. - TCC: Appeal of over-payment of Canada Child Tax Benefits by shared-custody parent rejected

27 juillet 2016 By Bill Innes

Précis: Ms. Crete separated from her ex-spouse in early 2012 and thereafter she and he ex-spouse shared custody of their children. She continued to receive Canada Child Tax Benefits as before until 2014 when, in response to a CRA request for confirmation of her status, she indicated that he was a shared-custody parent (in addition, CRA admitted that she had specifically informed CRA of the shared custody arrangement in late 2013). As a result of that she was assessed for overpayments of Canada Child Tax Benefits (and related GST Credits).
Crete v. R. - TCC: Appeal of over-payment of Canada Child Tax Benefits by shared-custody parent rejectedPlus >

Imperial Oil v. R. - FCA: Taxpayer not entitled to interest refund through the judicial review process

26 juillet 2016 By Bill Innes

Précis: This is an appeal of a decision blogged earlier on this site where Justice Gagné of the Federal Court dismissed two judicial review applications asking for interest on funds received pursuant to the operation of the Syncrude Remission Order. The decision involves the rather novel proposition of the applicants that they were entitled to interest on the funds remitted on the remission order by analogy to tax overpayments under the Income Tax Act. The Federal Court of Appeal upheld the earlier decision holding that the remission order had nothing to do with tax payable and did not engage the refund interest mechanism under the Income Tax Act. Both appeals were dismissed with costs.
Imperial Oil v. R. - FCA: Taxpayer not entitled to interest refund through the judicial review processPlus >

Connolly v. R. - TCC: Taxpayer met onus of showing no benefit on transfer from common-law spouse

26 juillet 2016 By Bill Innes

Précis: Ms. Connolly was assessed under subsection 160(1) for $76,884.17 in respect of cheques she received from her common-law partner, Mr. Wayne MacVicar, while he had a tax debt in the amount of no less than $76,884.17 in respect of his 2000 taxation year. The Tax Court reviewed the evidence and concluded that Ms. Connolly met the evidentiary onus of establishing that she had given consideration for the funds she received from Mr. MacVicar in the form of various loans and payments made by her in prior years. As a result her appeal was allowed with costs.
Connolly v. R. - TCC: Taxpayer met onus of showing no benefit on transfer from common-law spousePlus >

Rio Tinto Alcan v. R. - TCC: Tax Court allows pre-commitment investment banker fees

25 juillet 2016 By Bill Innes

Précis: At issue in this appeal were roughly $100 million in expense claims in two related transactions: one acquisition transaction in 2003 and one disposition in 2004. The claims involved many different types of expenses, but the bulk (roughly $50 million) represented fees paid to investment bankers. The Tax Court held that the fees paid prior to the transactions having been the subject of a commitment to proceed were deductible as “Oversight Expenses” since the taxpayer was aggressively involved in the pursuit of increased shareholder value on a continuous basis. Costs are under reserve pending submissions from the parties.
Rio Tinto Alcan v. R. - TCC: Tax Court allows pre-commitment investment banker feesPlus >

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