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Kandiah v. The Queen, 2014 TCC (C Miller) — New Housing GST Rebate: You or your relative must intend to live in the building as your primary residence; “Camping” doesn’t count.

“[1]            Mr. Mahendran Kandiah appeals by way of the informal procedure the Minister of National Revenue (the “Minister”) assessment denying Mr. Kandiah the GST/HST New Housing Rebate (the “Rebate”) of $24,000 in connection with the purchase of 50 Minerva Avenue in Toronto. To qualify for this Rebate, which is an Ontario rebate, it is still necessary for Mr. Kandiah to bring himself within the requirements… Read More »Kandiah v. The Queen, 2014 TCC (C Miller) — New Housing GST Rebate: You or your relative must intend to live in the building as your primary residence; “Camping” doesn’t count.

Hedges v. The Queen, 2014 TCC (C. Miller) — illegal drugs sold for “therapeutic reasons” could be zero-rated for GST

In this case, the TCC ruled that illegal drugs sold for “treatment, mitigation or prevention of a disease, …, or its symptoms”, are still “drugs” for GST purposes.  The result would be that they’re “zero-rated” under ETA s. VI:I:2(d); i.e., no tax collectible on their sale but the supplier could claim input tax credits.   “[66]        A more generic definition is, I find, appropriate, and given the FDA is the primary regulatory regime… Read More »Hedges v. The Queen, 2014 TCC (C. Miller) — illegal drugs sold for “therapeutic reasons” could be zero-rated for GST

Immunovaccine Technologies Inc. v. Canada, 2014 FCA (Boivin JA)–A government loan you don’t have to repay is “government assistance” that can reduce your credits and deductions

Government assistance can reduce tax credits or deductions and it can be included in income (see ITA s. 12(1)(x).)  Here, the FCA agreed with the TCC that a loan “from the Atlantic Canada Opportunities Agency (ACOA) for the tax years 2005, 2006, 2007, and 2008 were “government assistance” pursuant to subsection 127(9) of the Income Tax Act, R.S.C. 1985, c. 1 (5th Supp.) (the Act). As government assistance, these sums reduce the amount of… Read More »Immunovaccine Technologies Inc. v. Canada, 2014 FCA (Boivin JA)–A government loan you don’t have to repay is “government assistance” that can reduce your credits and deductions

Porotti v. M.N.R, 2014 TCC Woods J. –If you try to overcome prior inconsistent statements by saying you lied, you damage your credibility and can lose your case

Citing the FCA decision in 1392644 Ontario Inc. (cob Connor Homes) v M.N.R., 2013 FCA 85 (CanLII), Justice Woods stated the legal principles for employee-independent contractor cases: “‘The central question at issue remains whether the person who has been engaged to perform the services is, in actual fact, performing them as a person in business on his own account. As stated in both Wiebe Door and Sagaz, in making this… Read More »Porotti v. M.N.R, 2014 TCC Woods J. –If you try to overcome prior inconsistent statements by saying you lied, you damage your credibility and can lose your case

Mackey v. The Queen, 2014 TCC Paris–You can’t appeal if you haven’t objected; and you can’t use Tax Court to correct CRA payment allocation errors

“[3]            With respect to the reassessments for the reporting periods ending December 31 of 2006, 2007, 2008 and 2010, the Respondent filed affidavit evidence to show that Mr. Mackey had not filed notices of objection to those reassessments. Section 306of the Excise Tax Act (Act) requires that a taxpayer file a notice of objection prior to commencing an appeal in this Court. Therefore I agree with the… Read More »Mackey v. The Queen, 2014 TCC Paris–You can’t appeal if you haven’t objected; and you can’t use Tax Court to correct CRA payment allocation errors

Gilbert c. Canada (Revenu National), 2014 CF 890 (St-Louis)–You can’t use CRA Taxpayer Relief & Federal Court judicial review to challenge an assessment

The taxpayer challenged three different CRA assessments, with some success, in the Tax Court of Canada and the Federal Court of Appeal. (There were at least four hearings overall; the SCC refused leave to appeal the FCA decision on the appeal of the s. 160 non-arm’s length transfer assessment.)   He then sought interest relief on the basis that the assessments were invalid and made in… Read More »Gilbert c. Canada (Revenu National), 2014 CF 890 (St-Louis)–You can’t use CRA Taxpayer Relief & Federal Court judicial review to challenge an assessment

Devon Canada Corporation v. The Queen, 2014 TCC (Graham)–Large corporations must state issues carefully in the Notice of Objection but the reasons may change

Large corporations must comply with stricter rules for their Notices of Objection.  They must state the issues and the amount of money related to each issue.  Failure to do so prevents an appeal on the issue.  “[11]        The courts have not yet had the opportunity to fully consider the parameters of subsections 165(1.11) and 169(2.1) but there are themes that have emerged from the cases that have been… Read More »Devon Canada Corporation v. The Queen, 2014 TCC (Graham)–Large corporations must state issues carefully in the Notice of Objection but the reasons may change

Elbadawi v. The Queen, 2014 TCC 259 (D. Campbell)–If the Crown doesn’t plead all the assumptions to make its case, you may win, even without your own evidence

This case gives another example of the importance of reading the paragraph in the Crown’s “Reply” that lists the facts CRA assumed when assessing you.  You must prove facts on which you rely, if they oppose the Crown’s assumptions.  But the Crown must prove all other facts on which it relies, beyond the ones it says CRA assumed:  “[24]        Any assumption of fact that… Read More »Elbadawi v. The Queen, 2014 TCC 259 (D. Campbell)–If the Crown doesn’t plead all the assumptions to make its case, you may win, even without your own evidence

Langlois c. M.R.N, 2014 CCI 257 (Tardif) — For EI & CPP, employment means subordination to employer’s control

“[34]  The distinction between the two contracts [of employment and independent contractor] is the existence of a duty of subordination where one party has authority over the other, the power of control and the ability to supervise, to intervene and sanction the work executed by the other party. “[35]  By contrast, the independent contractor relation assumes that the parties to the negotiated contract transact and… Read More »Langlois c. M.R.N, 2014 CCI 257 (Tardif) — For EI & CPP, employment means subordination to employer’s control

Olney v. The Queen, 2014 TCC 262 (C. Miller)–CAA membership and cell phone are not creditable medical expenses; a personal trainer and clothing alterations may be; house-hunting is not a moving expense

“[22]        The cell phone and CAA membership, while needed by Ms. Olney, are simply not medical expenses under the provisions of the Act.” “[25] …  I have no difficulty in finding that what the personal trainer did, in ensuring Ms. Olney maintained strength in dealing with not having two arms, was a form of treatment of a physical disorder, therapy. What Ms. Olney was receiving was a… Read More »Olney v. The Queen, 2014 TCC 262 (C. Miller)–CAA membership and cell phone are not creditable medical expenses; a personal trainer and clothing alterations may be; house-hunting is not a moving expense

Ochitwa v. The Queen, 2014 TCC 263 (C. Miller) — Child support for more than one child: the right to a tax credit depends on the wording of the order or separation agreement

If a court orders each spouse to pay a support amount for their children, each might be able to claim the dependent tax credit for one of the children.  If the court calculates the support amount due from each parent and orders that only one parent pay a net amount to the other: the payer gets no credit.   [8]    … I am perturbed… Read More »Ochitwa v. The Queen, 2014 TCC 263 (C. Miller) — Child support for more than one child: the right to a tax credit depends on the wording of the order or separation agreement

McDermid v. The Queen, 2014 TCC 264 (Woods)–Disability credit: the physician’s check-the-box form is misleading

This was a case of two children with learning disabilities.  Doctors gave the necessary positive certificates for the tax credit.  “[8] … Having a positive certificate is not the end of the matter, however. The Court must also be satisfied that the certificate is correct.” After hearing the physicians, Woods J. found one child was impaired, the other was not. “[14]        I agree with… Read More »McDermid v. The Queen, 2014 TCC 264 (Woods)–Disability credit: the physician’s check-the-box form is misleading

Soshiroda v. The Queen, 2014 TCC 256 (Bedard) — You could lose because you don’t call evidence that could help you

“’”It is certainly a maxim that all evidence is to be weighed according to the proof which it was in the power of one side to have produced, and in the power of the other to have contradicted.”‘” “‘The application of this maxim has led to a well‑recognized rule that the failure of a party or a witness to give evidence, which it was in… Read More »Soshiroda v. The Queen, 2014 TCC 256 (Bedard) — You could lose because you don’t call evidence that could help you

Gariepy v. The Queen, 2014 TCC (Boyle) — an unsigned director’s resignation can start the 2-year limit on liability

NOTE: THIS DECISION WAS OVERTURNED BY THE FCA: Canada v. Chriss 2016 FCA 236.   Directors may be liable for a corporation’s failure to remit employee source deductions or GST.  But there is a two-year time limit on these assessments: if the director resigned more than two years before the CRA assesses, the director is not liable.  (See ETA s. 323(5) and ITA s. 227.1(4).)   Here, in defending against a 2008 directors’… Read More »Gariepy v. The Queen, 2014 TCC (Boyle) — an unsigned director’s resignation can start the 2-year limit on liability

Hamer v. The Queen, (2014 TCC Woods) –You may not be able to object to a reassessment, even if you never got the CRA’s notice of it

Suppose CRA reassesses you, claiming you owe tens of thousands of dollars.  CRA says it sent you a Notice of Reassessment but you never got it.  As you didn’t know about the assessment, you never filed an objection and now CRA says you’re too late to do so and it begins to take collection steps.  Are you really too late?  Maybe — though it was… Read More »Hamer v. The Queen, (2014 TCC Woods) –You may not be able to object to a reassessment, even if you never got the CRA’s notice of it

International Hi-Tech Industries Inc. v. The Queen, (2014 TCC  Bocock) — TCC says a secured creditor can appeal a bankrupt’s GST assessment.  Is the TCC right?  

The Crown sought to dismiss the appeal, brought by the bankrupt GST registrant’s secured creditors, on the basis that the secured creditors can’t appeal a bankrupt’s assessment to get ITC refunds.  Justice Bocock thought that secured creditors, exercising rights under a general security agreement (GSA), can appeal the bankrupt’s GST assessment.   But Justice Bocock did not consider the effect of s. 67 of the Financial Administration Act. … Read More »International Hi-Tech Industries Inc. v. The Queen, (2014 TCC  Bocock) — TCC says a secured creditor can appeal a bankrupt’s GST assessment.  Is the TCC right?  

Health Quest Inc v. The Queen, (2014 TCC Campbell) — Read carefully the Government’s Reply for missing assumptions

Generally, a taxpayer or GST appellant must prove its case against the Minister’s assumption of facts.  Usually, in a separate (and often long paragraph), the Government states the CRA’s assumptions in the Tax Court document called a “Reply”.  In this HST case (where the appellant didn’t have all the evidence it might have needed), the Court allowed the appeal because the Reply explained the CRA’s… Read More »Health Quest Inc v. The Queen, (2014 TCC Campbell) — Read carefully the Government’s Reply for missing assumptions

Gerbro Inc. v. The Queen, (2014 TCC Woods) — Have you accidentally waive solicitor-client privilege in your Tax appeal?

In this Tax Court motion, Justice Woods discusses when a taxpayer has impliedly waived privilege by pleading in its Notice of Appeal advice from a lawyer. Here, the taxpayer said:  “[42] … 67. Until November 8, 2006, and particularly at the time of making the investments in the Funds, it was Gerbro’s understanding that the proposed amendments to section 94.1 of the ITA would come into force with retroactive… Read More »Gerbro Inc. v. The Queen, (2014 TCC Woods) — Have you accidentally waive solicitor-client privilege in your Tax appeal?

Galachiuk v. The Queen, (2014 TCC Graham) — Failure to report penalty – due diligence in either of two tax years

Under subsection 163(1) of the Income Tax Act, a taxpayer who fails to report income in two tax returns out of four tax years is liable to a 10% penalty based on the unreported amount of tax. A matching provincial penalty applies. (See “Lower Penalties Cost More” on this website.) The penalty applies even if taxes were withheld at source and reported to CRA by the payer… Read More »Galachiuk v. The Queen, (2014 TCC Graham) — Failure to report penalty – due diligence in either of two tax years

Canada (National Revenue) v. Cameron, (2014 FC Manson) — Contempt of Court for failing to give documents and information to CRA

Under section 231.7 of the Income Tax Act, a judge of a superior court or the Federal Court may order a person to give CRA auditors access, assistance, information or documents sought under ITA s. 231.1.  If the taxpayer doesn’t comply with the order, the court will demand that the taxpayer show why he isn’t in contempt. If the taxpayer doesn’t explain his failure, the court can impose a fine or… Read More »Canada (National Revenue) v. Cameron, (2014 FC Manson) — Contempt of Court for failing to give documents and information to CRA

Ontario (Attorney General) v. 51 Taylor Avenue, (2014 ONCA MacPherson) — You could lose your apartment building if you don’t try to evict tenants involved in illegal drugs

“[3]         51 Taylor is a 12-unit residential apartment building in Chatham.  … “[7] … Between May 1, 2002 and August 13, 2007, when the respondent Attorney General of Ontario (“AGO”) obtained a preservation order, there were 311 documented police occurrences.  During the same period, 21 search warrants were executed at the Property, primarily at three apartments, resulting in 49 arrests, with 119 charges being laid. … Read More »Ontario (Attorney General) v. 51 Taylor Avenue, (2014 ONCA MacPherson) — You could lose your apartment building if you don’t try to evict tenants involved in illegal drugs

Ontario (Attorney General) v. 714 Railton Avenue, (2014 ONCA MacPherson)  — Forfeiture: If the federal prosecutor promises you that you won’t forfeit your home if you plead guilty, you may be protected later

This is another forfeiture case.  Here, the Ontario Government tried to seize a home the owner used for a marijuana grow operation.  The Court of Appeal agreed that the forfeiture order was “clearly not in the interests of justice”.    “[8] … Mr. Dowdle … pleaded guilty to the production offence only after receiving an assurance from the federal Crown that there would be no attempt… Read More »Ontario (Attorney General) v. 714 Railton Avenue, (2014 ONCA MacPherson)  — Forfeiture: If the federal prosecutor promises you that you won’t forfeit your home if you plead guilty, you may be protected later

Kinglon Investments Inc. v. The Queen, (2014 TCC Graham)–the Crown can’t make vague pleadings, waiting for discovery to find evidence to support its theories of the case

Like the rules of provincial courts, the Tax Court General Procedure Rules allow a party or the Court to strike pleadings to speed up the appeal and keep out abusive or improper claims.  (See Rule 53(1)(d) of the Tax Court of Canada Rules (General Procedure).)  Here, the taxpayer brought a motion to strike some of the Crown’s case on a tax shelter investment.  The purpose of pleadings… Read More »Kinglon Investments Inc. v. The Queen, (2014 TCC Graham)–the Crown can’t make vague pleadings, waiting for discovery to find evidence to support its theories of the case

Kardaras v. The Queen, (2014 TCC Pizzitelli) — You must go to provincial court if you want an order confirming a tax debtor held property for you under “constructive trust”

CRA can pursue one spouse for the other’s tax debts, if the tax debtor transfers property to his spouse for less than fair market consideration.  This case involved GST and the CRA’s power under subsection 325(1) of the Excise Tax Act.  (Section 160 is the matching rule under the Income Tax Act.)   As one of her defences, the Appellant, Ms. Karadaras, argued that her husband held the transferred… Read More »Kardaras v. The Queen, (2014 TCC Pizzitelli) — You must go to provincial court if you want an order confirming a tax debtor held property for you under “constructive trust”

766743 Ontario Limited (Soben Mgmt Ltd.) v. M.N.R., (2014 TCC Bocock)  — Dental hygienist at dental clinic was an employee

This decision will interest dentists and dental hygienists.   It seems hard for hygienists in most dental practices to claim to be independent contractors.  But in this case the circumstances were tougher still: “[21]  …  The Appellants own lawyer drafted the Employment Letter, without input on the terms from the worker who saw no opportunity for negotiation.”   …  the document was laced with tailings… Read More »766743 Ontario Limited (Soben Mgmt Ltd.) v. M.N.R., (2014 TCC Bocock)  — Dental hygienist at dental clinic was an employee

Bolduc v. The Queen, (2014 TCC V A Miller) — Proportionality, materiality and relevance limit the discovery of documents

Under the TCC’s General Procedure, parties are to disclose to one another the documents they intend to rely on.  This is “the default rule” in Rule 81.  But parties can agree, or either can apply to the Court for an order, that each disclose all documents it has, whether or not it plans to rely on them.   In this motion decision, in a “Fiscal Arbitrators”-like… Read More »Bolduc v. The Queen, (2014 TCC V A Miller) — Proportionality, materiality and relevance limit the discovery of documents

Breathe E-Z Homes Ltd. v. M.N.R., (2014 TCC Bocock) — Missing deadline for an extension to file a Notice of Appeal is not always fatal

The Tax Court is most strict in interpreting objection and appeal filing deadlines.  So this case is important because the taxpayer missed the normal deadline and the 90-day EI and CPP deadline for applying for an extension of time.  Still, the TCC treated the appeal as valid.  “[18]        Generally, the authorities may be divided into several categories: deadlines completely missed by even a few days for no reason; incomplete or… Read More »Breathe E-Z Homes Ltd. v. M.N.R., (2014 TCC Bocock) — Missing deadline for an extension to file a Notice of Appeal is not always fatal

2253787 Ontario Inc. v. The Queen, (2014 TCC Bocock) — You can’t get HST ITCs if you buy product through agents which you couldn’t buy directly on your own

“The Appellants are two private companies incorporated for a single purpose: to commercially engage in the process of leapfrogging the staged continental releases of the iconic Apple iPhone 4 and iPhone 4s in 2010 and 2011, respectively. “Wily entrepreneurs such as Mr. Cao, the principal of the two Appellants, circumvent this regional launch management through a series of micro-managed purchases of product in the protective… Read More »2253787 Ontario Inc. v. The Queen, (2014 TCC Bocock) — You can’t get HST ITCs if you buy product through agents which you couldn’t buy directly on your own

Elmansour v. The Queen, (2014 TCC D’Auray) — It is hard to live well in Canada without reporting income or offshore assets

Can you immigrate to Canada, support a family of seven, and buy businesses and homes without reporting income or offshore property?  Probably not.   This case offers a good review of the kinds of documents CRA may examine for a net worth assessment: “the CRA auditor obtained further information by issuing requirements for information. I will not mention all the documents that were obtained by… Read More »Elmansour v. The Queen, (2014 TCC D’Auray) — It is hard to live well in Canada without reporting income or offshore assets

Fio Corporation v. The Queen, (2014 TCC D’Arcy)–The deemed undertaking rule–Should you rush to Tax Court?

If you disclose documents or facts to the Government during your Tax Court appeal, may the Government use that information to reassess you?  Justice D’Arcy says no.  But the Government has appealed to the FCA; so the answer may change.   There is a rule in provincial court civil actions that if you give documents to the other side during “discovery”, that other party may not… Read More »Fio Corporation v. The Queen, (2014 TCC D’Arcy)–The deemed undertaking rule–Should you rush to Tax Court?

Jhanji v. The Queen, 2014 TCC Hogan — You don’t necessarily have to live with your child to qualify for the CCTB

You immigrate to Canada.  Your wife dies.  You leave your son at boarding school in India. When your son has school breaks, he stays in India with your sister and brother’s families and your father. In 2012, which was included in the base year in issue, you spent about 10 weeks with your son on two separate visits.   You had set up and regularly… Read More »Jhanji v. The Queen, 2014 TCC Hogan — You don’t necessarily have to live with your child to qualify for the CCTB

Sarrazin c. La Reine, 2014 CCI Favreau — Don’t give gifts to or accept gifts from family members who may owe tax debts

A father gifts land worth about $64,000 to his son.   The son sells the land back to the father about a week later for $2000. At the time of the transfers, the son owed sales taxes of about $60,000. Was the father liable for the son’s tax debts ETA s. 325(2), based on the below-market non-arm’s length transfer under ?  Yes, said Justice Favreau.   One can’t tell… Read More »Sarrazin c. La Reine, 2014 CCI Favreau — Don’t give gifts to or accept gifts from family members who may owe tax debts

David v. The Queen, (2014 TCC Woods) — You are entitled to a donation credit for your actual gift, even if the charity issues you an inflated receipt

Suppose you are lured into a charity scam and you pay 10% of the amount shown on an inflated donation receipt.  Are you entitled to a tax credit for the actual cash value (i.e., the 10%) of your gift?  Yes, says Justice Woods: “[58]        The reasons of the Federal Court of Appeal in Berg confirm that the receipt of a benefit will negate a gift. However, the Court… Read More »David v. The Queen, (2014 TCC Woods) — You are entitled to a donation credit for your actual gift, even if the charity issues you an inflated receipt

AG v. $4,067,685.10 (Canadian Currency), 2014 ONSC 2537  (Vallee) — If you weren’t involved in the crime, your property won’t be forfeited even if it was used for crime

Fercan Developments Inc. owned an $8MM former Molson’s Brewery plant.  But the property was better known for being Canada’s largest and best concealed marijuana grow operation, raising “a large number of plants that were capable of generating $8,000,000 in sales per year.”  [Para. 11] Vince DeRosa owned Fercan.  His brother Robert managed Fercan’s properties in Barrie Ontario.  The Ontario Court of Justice found that “Robert had… Read More »AG v. $4,067,685.10 (Canadian Currency), 2014 ONSC 2537  (Vallee) — If you weren’t involved in the crime, your property won’t be forfeited even if it was used for crime

Canada v. Lehigh Cement Limited, (2014 FCA Stratas)–It’s OK to have double deductions in Canada to support international borrowing within a multinational group

Lehigh is the Canadian subsidiary of a Belgian multinational, CBR.  In a somewhat complicated set-up, a related US corporation reduced its taxable income by paying Lehigh tax-exempt dividends, which Lehigh then used to repay a debt to a related European lender.  Lehigh got the income for free from the US related party and then paid the income back to Europe as a tax deductible interest expense.  Was… Read More »Canada v. Lehigh Cement Limited, (2014 FCA Stratas)–It’s OK to have double deductions in Canada to support international borrowing within a multinational group

Canada (National Revenue) v. Chamandy, (2014 FC Mactavish)–CRA demands for information must be clear about the addressee

CRA has power to demand that a taxpayer provide information.   CRA sent a demand to Mr. Chamandy for documents and information related to a corporation of which he was a director.  He refused, for several reasons, including that some of the documents were protected by solicitor-client privilege.  So CRA applied to the Federal Court to order Mr. Chamandy to comply.  The Court refused the… Read More »Canada (National Revenue) v. Chamandy, (2014 FC Mactavish)–CRA demands for information must be clear about the addressee

Pilfold Estate v. Canada, (2014 FCA Sharlow) — A corporate registered office on a reserve is not enough for Indian Act exemption

Can “simply having [a] corporate head office on-Reserve, regardless of the nature or location of the business,” be “sufficient to locate any business derived by these corporate entities on-Reserve” so that the income would be exempt under s. 81(1)(a) of the Income Tax Act by reason of section 87 of the Indian Act?  No.   “[6]               … I agree with [Justice Miller of the TCC] that… Read More »Pilfold Estate v. Canada, (2014 FCA Sharlow) — A corporate registered office on a reserve is not enough for Indian Act exemption

McDavid v. The Queen, 2014 TCC Lamarre — Independent truckers may be able to claim GST ITCs on a variety of business expenses, including advertising 

Can you buy a motorcycle for your son to race in motocross and claim GST/HST input tax credits on the purchase and other race-related expenses because the motorcycle carries advertising for your business?  The Court in this case said the appellant could.   “[24] In my view, Ms. Ryan identified a business purpose with respect to all of the claims. The respondent did little to… Read More »McDavid v. The Queen, 2014 TCC Lamarre — Independent truckers may be able to claim GST ITCs on a variety of business expenses, including advertising 

McIntyre v. The Queen, (2014 TCC D. Campbell)–Criminal conviction by plea bargain does not bind you in a Tax Court appeal

The TCC’s General Procedure r. 58 allows the parties to shorten a hearing by having the Court decide a question of fact, law or both.  In this case, two of the three taxpayers had agreed to a plea bargain in CRA’s criminal prosecutions on some of the tax issues.  CRA refused to be bound by the agreed facts from the plea bargain, seeking to impose more tax.… Read More »McIntyre v. The Queen, (2014 TCC D. Campbell)–Criminal conviction by plea bargain does not bind you in a Tax Court appeal

Izumi v. The Queen, (2014 TCC Rossiter ACJ)–18-months is not too long to wait to have your status hearing dismissal set aside

You missed your status hearing and your case was dismissed.  (The Court had your wrong address.)  When the Crown sent you its bill of costs, you paid it, but sought legal advice to have the dismissal set aside so that you could continue your Tax Court appeal.  It took you 18 months to file your request to have the judgment against you set aside and… Read More »Izumi v. The Queen, (2014 TCC Rossiter ACJ)–18-months is not too long to wait to have your status hearing dismissal set aside

Prince v. ACE Aviation Holdings Inc., (2014 ONCA Strathy) — If the US IRS wrongly charges you tax, go to the US Courts first

Suppose Air Canada collects a US travel tax on your plane fare, should you be able to get it back by suing Air Canada in Ontario?   Canadian Courts, as a general rule, won’t enforce US tax laws in Canada.  In this case, Air Canada passengers sued Air Canada for improperly collecting US travel taxes on their plane fares.  The Ontario Court of Appeal put… Read More »Prince v. ACE Aviation Holdings Inc., (2014 ONCA Strathy) — If the US IRS wrongly charges you tax, go to the US Courts first

D’Errico v. Canada (Attorney General), (2014 FCA Stratas) — CPP disability pension if you can’t pursue “with consistent frequency” or “regularly” any “truly remunerative occupation”

You are injured in a car accident and generally can’t work despite numerous attempts to pursue work before the minimum qualifying period, but you teach yoga and earn about $75 per week.  Are you entitled to a disability pension under the Canada Pension Plan, R.S.C.?  You could be.   “[4]               Under subparagraph 42(2)(a)(i) of the Plan, a person has a “severe” disability if she is “incapable regularly of… Read More »D’Errico v. Canada (Attorney General), (2014 FCA Stratas) — CPP disability pension if you can’t pursue “with consistent frequency” or “regularly” any “truly remunerative occupation”

McAdams v. Canada, (2014 FCA Sharlow) — CRA can take inconsistent assessing positions pending resolution of a tax dispute

Suppose you transfer shares to a family trust, which redeems the shares and pays tax on the “deemed dividend” that results; and CRA assesses the trust and confirms the dividend.  Can the CRA later reassess you, saying the whole transfer to the trust was a sham, and tax you also on the deemed dividend, so that, for the time being, both you and the trust… Read More »McAdams v. Canada, (2014 FCA Sharlow) — CRA can take inconsistent assessing positions pending resolution of a tax dispute

Ghaeinizadeh v. Bennett Jones LLP, 2014 ONCA (Rosenberg) — You can ask for costs based on a high legal bill, then apply to have the fees assessed.  

“In all, Bennett Jones provided five accounts totalling $312,825.78 inclusive of taxes and disbursements for its work over the approximately three months that it was retained by the appellants.”  The lawsuit was aimed at collecting a $2MM debt, including using a Mareva injunction to prevent wasting of assets.   Alarmed at the high fee, the client changed lawyers and paid another law firm $200,000 to finish the case.… Read More »Ghaeinizadeh v. Bennett Jones LLP, 2014 ONCA (Rosenberg) — You can ask for costs based on a high legal bill, then apply to have the fees assessed.  

Toronto-Dominion Bank v. Comrie and Comrie, (2014 ONSC Coats) — Ontario Finance has priority over mortgagees for unpaid retail sales tax

Suppose you lend money to someone and take a mortgage as security.  Unknown to you, the debtor owes provincial retail sales tax.  Does the Crown’s Retail Sales Tax Act claim have priority over your mortgage?  Justice Coats says it does.   This view may shock some, as it suggests that a RSTA tax liability has priority over all security interests, even if the security is taken before the tax debt… Read More »Toronto-Dominion Bank v. Comrie and Comrie, (2014 ONSC Coats) — Ontario Finance has priority over mortgagees for unpaid retail sales tax

DiFlorio v. The Queen, (2014 TCC Rip CJ)–If your spouse is carrying on a business, you are not necessarily his partner

Suppose your spouse carries on a business.  Are you his partner just because you sign cheques, deposit them in a joint account, send packages by courier, and do other incidental services?  No, says Chief Justice Rip. Mr. DiFlorio carried on a business of selling illegal drugs to improve racehorse performance.  CRA assessed him and his wife for unremitted GST, treating them as partners in the… Read More »DiFlorio v. The Queen, (2014 TCC Rip CJ)–If your spouse is carrying on a business, you are not necessarily his partner

Patterson Dental Canada Inc. v. The Queen, (2014 TCC R. Masse DJ)  — You can get an extension of time for a late objection if you didn’t know about a court case in your favor

Suppose you let pass the 90 days to file your Notice of Objection, because you think the CRA’s assessment is right.  A year after the assessment, you find out about a court decision that seems to say CRA’s assessment is wrong.  Are you too late to file a Notice of Objection?  No, says judge Masse. This was an application to the Court for an extension… Read More »Patterson Dental Canada Inc. v. The Queen, (2014 TCC R. Masse DJ)  — You can get an extension of time for a late objection if you didn’t know about a court case in your favor

Vine Estate v. The Queen, (2014 TCC D. Campbell)–If you rely on your accountant without asking questions about your return, CRA can reassess you any time

If you trust your experienced accountant to file your tax returns rightly and you do not make any effort to review the return or ask basic questions, but the accountant makes a careless mistake, can CRA reassess you at any time?  Yes, the “normal” 3-year reassessment period will not apply to you.   Here, the executors of the Estate had relied on the accountants who… Read More »Vine Estate v. The Queen, (2014 TCC D. Campbell)–If you rely on your accountant without asking questions about your return, CRA can reassess you any time

Henson v. The Queen, (2014 TCC Woods) – CRA may clawback your EI payments because you got a large workers’ compensation benefit

Subsection 145. (1) of the Employment Insurance Act says you must repay 30% of your EI benefits if your “income for a taxation year exceeds 1.25 times the maximum yearly insurable earnings”.  But what if your income was high only because you got a large disability settlement payment from “a workers’ compensation claim” for an earlier tax year?   Must you still repay the benefits? Justice Woods says yes.… Read More »Henson v. The Queen, (2014 TCC Woods) – CRA may clawback your EI payments because you got a large workers’ compensation benefit

Dr. Mike Orth Inc. v. Canada, (2014 FCA Sharlow) – You cannot rely on solicitor-client privilege as an excuse for not proving your case

Can you defend yourself in Tax Court by claiming that you have the evidence but you do not have to disclose it because it relates to advice you got from your lawyer?   No.   This case was about the deductibility of legal fees.  The taxpayers argued “that they could not disclose more particulars of their legal expenses without waiving solicitor and client privilege, which… Read More »Dr. Mike Orth Inc. v. Canada, (2014 FCA Sharlow) – You cannot rely on solicitor-client privilege as an excuse for not proving your case