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Abreo v. R. – TCC: One of the last software charitable donation cases fails based on the Court finding the software had very little value

17 juin 2019 By Bill Innes

Précis: As most readers are aware the early 2000’s saw a raft of charitable donation in kind cases involving art, medicine, software, etc. Virtually all failed because the Courts held that the values attached to the gifts were inflated. This is one of the remnants of those lines of cases. One category of donation was of “Lotus Smart Suite” (“LSS”) from Systelligence Systems Inc. (“Systelligence”); the donation receipts claimed were for $600 per program. The Minister allowed $120 per program, i.e., what the participants in the donation plan had paid. The Court accepted the Crown’s evidence that the software was unlicensed and unauthorized by Lotus. Accordingly, the taxpayers had not adduced evidence to refute the donation amount used by CRA. In the case of the Blue and Purple Collection CD-ROMs donated in 2002 and 2003 the Court similarly found that the value was far less than the donation receipts claimed. Thus the Court dismissed all of the appeals. The Court however declined to award costs against the taxpayers since they had followed the Informal Procedure process in launching and pursuing their appeals.
Abreo v. R. – TCC: One of the last software charitable donation cases fails based on the Court finding the software had very little valuePlus >

AE Hospitality Ltd. v. R. – TCC: staff provided to catering companies were engaged in insurable/pensionable employment

14 juin 2019 By Bill Innes

Précis: This is a lengthy (217 paragraphs), erudite and factually complex decision involving 218 workers. The taxpayer, AE Hospitality Ltd. (AE), provided staff to two catering companies owned, in whole or in part, by related individuals. The Minister found that all of the employees were engaged in insurable and pensionable employment in 2016. The Court, after an extensive analysis agreed with the Minister’s position (without the necessity for recourse to the Minister’s alternative “placement agency” argument). An appeal in respect of two individuals in 2015 was allowed in part.
AE Hospitality Ltd. v. R. – TCC: staff provided to catering companies were engaged in insurable/pensionable employmentPlus >

Wilson v. R. – FCA: Tax Court dismisses appeal on procedural grounds – Court of Appeal upholds Tax Court

13 juin 2019 By Bill Innes

Précis: The Tax Court struck portions of the taxpayer’s Notice of Appeal and gave him 60 days to file an amended Notice of Appeal, which he failed to do. The Tax Court then ordered the taxpayer to file a compliant Notice of Appeal within 60 days. The taxpayer filed an amended Notice of Appeal and the Tax Court Judge concluded that the amended Notice of Appeal did not comply with the two preceding orders and dismissed the taxpayer’s appeal. The Federal Court of Appeal (per curiam) held that while dismissing an appeal on procedural grounds was a “severe remedy” there was “no palpable and overriding error of fact or mixed fact and law and no error of law by the Tax Court” so as to permit the Court of Appeal to allow the appeal [para. [25]]. Thus the appeal was dismissed with costs.
Wilson v. R. – FCA: Tax Court dismisses appeal on procedural grounds – Court of Appeal upholds Tax CourtPlus >

Genrdon v. R. – TCC: Employment in the Netherlands was not “insurable employment” for the purposes of the Employment Insurance Act

7 juin 2019 By Bill Innes

Précis: During the period under appeal Mr. Gendron worked for Shell Nederland Verkoopmaatschappij BV (“SNV”) in the Netherlands. He was seconded from his prior employer, Shell Canada Ltd. (“Shell”). The test for insurable employment outside Canada was two-fold: Was the employment insurable employment under the laws of the Netherlands, the place where the employment took place? Was Mr. Gendron’s employment in the Netherlands by an employer who is resident or has a place of business in Canada? If the answer to Question 1 was “Yes” or if the answer to Question 2 was “No”, Mr. Gendron was not engaged in insurable employment for the purposes of the Employment Insurance Act. The Tax Court found that Mr. Gendron, on the evidence, would have been entitled to benefits under the laws of the Netherlands while working for SNV thus answering Question 1 as “Yes”. Accordingly it was not necessary to answer Question 2 and the Court declined to do so. Thus Mr. Gendron’s appeal was dismissed. Each party was directed to bear their own costs.
Genrdon v. R. – TCC: Employment in the Netherlands was not “insurable employment” for the purposes of the Employment Insurance ActPlus >

Ghosi v. R. – TCC: Taxpayer not entitled to New Housing Rebate – no evidence of intent to change place of residence

27 mai 2019 By Bill Innes

Précis: The taxpayer claimed a New Housing Rebate of $24,000 in connection with the purchase of a property located at 128 Novan Crescent in Aurora, Ontario. The taxpayer was a teacher and he and his wife had lived in the same home in Markham since 2005. The agreement of purchase and sale was signed in 2015 by the taxpayer, his wife and a family friend. The evidence was that the family friend wanted a place where her son could move because of ongoing disputes with his father. Title to the property was transferred in January of 2016 and in March the taxpayer moved some basic necessities to the house, retaining ownership of his home in Markham where most of his personal belongings remained. Although the taxpayer testified that he planned to rent and renovate the Markham property that never happened and he and his wife moved back there in June of 2016. The Tax Court Judge concluded that the taxpayer never formed a settled intention to treat the Aurora property as his primary and permanent place of residence. As a result the appeal was dismissed but without costs since this was an informal procedure appeal.
Ghosi v. R. – TCC: Taxpayer not entitled to New Housing Rebate – no evidence of intent to change place of residencePlus >

Goheen v. R. – FCA: Crown not required to amend pleadings to rely upon evidence disclosed by discovery of taxpayer – no reversible error

22 mai 2019 By Bill Innes

Précis: The taxpayer claimed a US $30,000 charitable donation which CRA denied on the basis of absence of donative intent and imposed gross negligence penalties. During discoveries of the taxpayer it appeared that US $30,000 was subsequently deposited in the same account from which the alleged donation was made. The Crown relied upon that evidence at trial and the Tax Court dismissed the taxpayer’s appeal. The taxpayer appealed to the Federal Court of Appeal arguing, in part, that the Crown should have amended it pleadings if it intended to rely upon the US $30,000 deposit to support the disallowance of the alleged gift. The Court of Appeal dismissed the appeal from the bench holding that the deposit was simply evidence of the taxpayer that was relied upon by the Crown to support its assessing position, i.e., absence of donative intent. Costs were awarded to the Crown.
Goheen v. R. – FCA: Crown not required to amend pleadings to rely upon evidence disclosed by discovery of taxpayer – no reversible errorPlus >

Trower v. R. – TCC: Amounts of dividends paid without proper corporate authority not taxable in the hands of former director/shareholder

16 mai 2019 By Bill Innes

Précis: The taxpayer and her estranged spouse were shareholders and directors of Cove BD Inc. (Cove). They separated in the Fall of 2015. The taxpayer ceased to be a director and shareholder of Cove on October 2, 2016 (or, possibly, September 30, 2016). In February of 2017 her husband caused Cove to declare retroactive dividends of $50, 342 payable to the taxpayer in 2016 (representing a taxable amount of $58,900). CRA assessed her in respect of the alleged dividends and she appealed to the Tax Court. The Tax Court Judge found that Cove could not legally pay dividends to the taxpayer in respect of the period of 2016 in which she was a director and shareholder without her concurrence, which she had not given. Accordingly the appeal was allowed. The parties were to bear their own costs.
Trower v. R. – TCC: Amounts of dividends paid without proper corporate authority not taxable in the hands of former director/shareholderPlus >

Burton v. R. – TCC: Insufficient evidence of binding legal agreement to permit deduction of support payments in 2013

14 mai 2019 By Bill Innes

Précis: The taxpayer sought to deduct spousal support payments made in 2013. CRA allowed deductions for payments made in 2014 and 2015 on the basis that a finalized separation agreement was entered into in 2015 since under the provisions of the Income Tax Act deductions were permitted in “the year and previous year” in which the agreement was reached. CRA denied the deduction for 2013 on the basis that no binding separation agreement was reached in either 2013 or in 2014. The taxpayer appealed to the Tax Court which agreed with CRA’s position and dismissed the taxpayer’s appeal, but without costs since this was an informal procedure appeal.
Burton v. R. – TCC: Insufficient evidence of binding legal agreement to permit deduction of support payments in 2013Plus >

Creteco-Gunner Corporation v. R. – FCA: Taxpayer not denied procedural fairness in Tax Court - appeal dismissed

10 mai 2019 By Bill Innes

Précis: The taxpayer was assessed EI and CPP in respect of its workers. It appealed to the Tax Court and the appeal was dismissed from the bench. It further appealed to the Federal Court of Appeal raising two arguments: The Tax Court Judge had denied the taxpayer procedural fairness in not assisting with the taxpayer’s conduct of its case. The Tax Court Judge relied upon a document marked for identification only. The Court of Appeal rejected both arguments and dismissed the appeal with costs.
Creteco-Gunner Corporation v. R. – FCA: Taxpayer not denied procedural fairness in Tax Court - appeal dismissedPlus >

CRL Engineering Ltd. v. R. – TCC: “Real‑Time Vehicle Arrival Prediction Model for Transitlive” research project to predict movements of transit buses was entitled to SRED credits

1 mai 2019 By Bill Innes

Précis: The taxpayer claimed SRED credits for a research project known as “A Real‑Time Vehicle Arrival Prediction Model for Transitlive” which was designed to provide accurate real‑time predictions for public transit bus movements. The Court reviewed the five traditional tests for determining whether research met the SRED criteria and concluded that this project did. Thus the appeal was allowed, limited to $25,000 per taxation year since the appellant had pursued the informal procedure option.
CRL Engineering Ltd. v. R. – TCC: “Real‑Time Vehicle Arrival Prediction Model for Transitlive” research project to predict movements of transit buses was entitled to SRED creditsPlus >

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