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Mr. Hall donated “$24,800 to the International Association of Scientologists”, which does many clearly charitable things.  But IAS was not a registered charity in Canada; so he was not entitled to the donation tax credit he claimed.  That is a simple result and the case would not be interesting except that Mr. Hall claimed that denying him the credits infringed his right to equality under s.… Read More »Hall v. The Queen, (2013 TCC Pizzitelli) — The Charter of Rights does not guarantee you tax credits for all your medical expenses or for all your donations to every charity

Suppose you miss the 90-day deadline for filing a notice of objection to CRA’s reassessment of your tax return and you miss the one-year extension period too.  The law is strict then: You can’t object to the reassessment, no matter how good your reasons.  But if you could show that CRA never sent you the reassessment notice or that it sent it to a wrong… Read More »Chomatas v. The Queen, 2013 (TCC Woods) — If you miss the notice of objection deadline because you didn’t get CRA’s reassessment notice, ask for proof CRA sent it

What happens if CRA reassesses you and you disagree?  You file a Notice of Objection.  What happens if, while you wait for CRA to review your objection, you ask it to adjust your tax return for other reasons, unrelated to the issues in the objection?  You could unwittingly invalidate your Notice of Objection, lose your right to challenge the earlier reassessment, and be forced to… Read More »DouangChanh v. The Queen, (2013 TCC Woods) — You can invalidate your ongoing Objection by asking CRA to adjust your tax return    

This is a simple case on a failed New Housing Rebate application.   There is a range of rebates related to new housing.  The most common rebate is the one for new housing bought from a builder.  If you want the GST New Housing Rebate (with a provincial rebate portion, it can be very valuable), you must meet two main conditions:  (1) When you sign… Read More »Napoli v. The Queen, (2013 TCC Paris)  — New Housing Rebates: You have 2 years to apply & you must choose between owner-used or rented

As noted in an earlier post on the Bower case, Canada spent about $4 billion in 2011-2012 on the refundable GST credit and about $10 billion on the Child Tax Benefit. This may explain why the rules are complex and the CRA is strict.  Obviously, Canada can only afford to give these credits to its own residents.  (See the tables in the Department of Finance’s Tax Expenditures and Evaluations… Read More »Kwangwari v. The Queen, (2013 TCC Lamarre) — Canada Child Tax Benefit: You or spouse must be a Canadian citizen or qualified resident and CRA’s mistakes can’t make you qualify

For most taxpayers, CRA has only 3 years to reassess a tax return, after originally processing it.  For GST/HST returns, the period is four years after the person was supposed to file the return, whether or not he filed it.  (See ITA s. 152(3.1) and ETA s. 298(1)(a).) As Justice Campbell Miller confirms in this decision, if the CRA has “‘requested additional information from the [taxpayer or registrant] and not having… Read More »Golini v. The Queen, (2013 TCC C. Miller)  — If you don’t give an auditor information, CRA can issue a “protective reassessment”

Taxpayers may claim a credit against taxes for their “medical expenses” if the expenses are higher than $2,152 (for 2013) or “3% of net income” (whichever is less).   “Medical expenses” are defined in s. 118.2(2).  They can include renovations or alterations to your home if they help a person with a “severe and prolonged mobility impairment” access or move around in the home.  In cases before… Read More »Sotski v. The Queen, (2013 TCC Pizzitelli)  — Medical expense credit for engineered laminate hardwood flooring

27/9/2013 0 Comments For most taxpayers, CRA has only 3 years to reassess a tax return, after originally processing it.  For GST/HST returns, the period is four years after the person was supposed to file the return, whether or not he filed it.  (See ITA s. 152(3.1) and ETA s. 298(1)(a).) As Justice Campbell Miller confirms in this decision, if the CRA has “‘requested additional information from the [taxpayer or registrant]… Read More »Golini v. The Queen, (2013 TCC C. Miller)  — If you don’t give an auditor information, CRA can issue a “protective reassessment”

This decision deals with Tax Court procedure: How can you speed up your case?  There are at least two rules designed to help parties end a case early.   One rule, for the “special case”, recognizes that sometimes the parties may agree on the facts so that the Court need simply decide a question of law.  If the Court decides that hearing the case in… Read More »Sentinel Hill Productions IV Corporation v. The Queen, (2013 TCC, Woods) – Ways to speed up your appeal

This was a procedural motion.  Mr. Kerouac claimed a tax credit for a $2 million donation to the City of Larouche in Quebec.  CRA said he had only donated $1 million.  As well as appealing CRA’s reassessment in the Tax Court, Mr. Kerouac was suing the City in Quebec Superior Court, to get back his $2 million.   The City brought a motion in the Tax… Read More »Kérouac c. La Reine, (2013 TCC, Jorre) – You can’t go into someone else’s Tax Court Appeal just to get help with your civil lawsuit

There aren’t many cases dealing with Alternative Minimum Tax and how to calculate it.  This is one.  Mr. Gelinas had rental properties.  He had losses in the 2009 and 2008 tax years.  Alternative Minimum Tax (AMT) is designed to make sure that high income taxpayers pay some tax on their income, even though their tax deductions from investment losses or exempt gains might otherwise mean… Read More »Gélinas c. La Reine (2013 TCC, Jorre) – Alternative minimum tax:  You can’t use prior year losses from rental interest expense to reduce your income for AMT  

CRA investigated Mr. Taylor for criminal tax evasion but didn’t lay charges.  The case involved business and employment expenses, loans and embezzlement.  After 3 years of negotiations, Mr. Taylor, eager to have “the matter concluded quickly” signed a waiver of his appeal rights in exchange for CRA’s agreeing to remove gross negligence penalties.  Within days of signing his waiver, Mr. Taylor wrote the CRA that… Read More »Terry E. Taylor v. Her Majesty the Queen, (2013 SCC) — If you agree to settle your tax dispute with CRA, you probably can’t reverse it in Tax Court

This decision is helpful for saying when you may use background evidence to help interpret a contract.   Here, the taxpayers were farmers who supplied the Pharmaceutical company Wyeth Organics with estrogen from pregnant mares.  Wyeth paid the farmers several different amounts to cancel the supply contracts.  The CRA said that one of these amounts was a substitute or “surrogate” for annual revenue so that… Read More »River Hills Ranch Ltd. v. The Queen, 2013 TCC (Hogan) — You can use background oral and documentary evidence to explain a contract’s terms.

ITA s. 118.3 allows you a credit for physical or mental impairment.  You can get the credit if your impairment has lasted or will last for at least one year and, 90% or more of the time, your ability to do a basic act of daily life is “markedly restricted”.  One of these “basic acts” is dressing yourself.   In this case, Justice Miller thought… Read More »Wiley v. The Queen, 2013 TCC (VA Miller) – you can claim the disability tax credit if you can’t dress and bathe in a normal amount of time

This is a helpful case because it repeats the tests for “when a debt owing to the taxpayer had become bad” so that the taxpayer could claim a capital loss.  Paris J. relied on the FCA decision Rich v The Queen2003 FCA 38 (CanLII), where Rothstein J. (now on the SCC) said: “[12 ]     The assessment of whether a debt is bad is one based… Read More »Fisher v. The Queen, (2013 TCC, Paris) – When is a debt bad so that you can claim a capital loss?

Mr. Goulet renovated his house and garage, almost doubling its size.  He applied for the HST new housing rebate.  He didn’t get it.  You are entitled to a new housing rebate if you “substantially renovate” your home.  But the TCC said that to qualify as a “substantial renovation”, “The definition essentially requires that the existing house be gutted.”  (Para. 15.)  An addition, to qualify, must… Read More »Goulet v. The Queen (2013 TCC, Graham) – You can get a GST new housing rebate for a renovation but only if it guts the old house

Ms. McLeod’s is another example of a fake business loss scheme.  Many of these are in the TCC now.  A group called “Fiscal Arbitrators” was the main advocate but many others modeled on them.   The idea is that you are not taxable because you are an agent for yourself.  (The argument’s more involved but, as Justice Woods said, it’s “pure nonsense”.) Ms. McLeod “was… Read More »McLeod v. The Queen, 2013 TCC (Woods) – Employees: Do not listen to false business loss schemes.  The penalties will ruin you.  

Dr. Klundert was an optometrist who didn’t report his income.  CRA prosecuted him through three trials, two appeals to the Ontario Court of Appeal and one attempt to appeal to the Supreme Court of Canada.  The Ontario Court convicted him of tax evasion.  CRA then reassessed his 1993 – 1996 tax years and he appealed the reassessments to the TCC.  Justice Pizzitelli dismissed Dr. Klundert’s… Read More »Klundert v. The Queen (2013 TCC, Pizzitelli) – If a criminal court says CRA’s evidence is illegal, the TCC may refuse it too

Canada has a rich but complex set of tax rules to help businesses carry out scientific research and experimental development (“SRED”).  The rules include a simpler “proxy method” for calculating the expenses that qualify for tax incentives. CalAmp hoped to include bonuses it paid to some of its employees when it was sold and became a public corporation trading shares in the US.  For Justice Bedard, the… Read More »CalAmp Wireless (2013 TCC, Bedard) — SRED proxy method – bonuses must relate to the SRED work

Her lawyer was only 7 days late in filing Ms. Hamilton’s Notice of Appeal in the Tax Court of Canada.  But the Tax Court refused her application to extend the filing time limit.  That refusal is surprising, especially because this was an Informal Procedure appeal.  Normally, the Government would agree to the application, when the taxpayer misses the deadline to appeal by so few days. … Read More »Hamilton (2013 TCC, V. Miller) – If you miss the 90-day deadline to appeal, you can apply for an extension but don’t count on it

Mr. Anonby showed that his employer had paid him more than CRA recognized.  He filed his tax return reporting $42,000 of income, including about $13,000 for withheld taxes, CPP and EI.  But his employer had not remitted that money and CRA refused to recognize it.  So, CRA reduced Mr. Anonby’s income to $29,000 — a lower amount but, because he got no credit for withheld… Read More »Anonby (2013 TCC, C. Miller) – If your employer doesn’t send your withheld taxes to the Government, you may still have to pay them.

Canada spent about $3.5 billion in the year ended June 2012 on the refundable GST credit and about $10 billion on the Child Tax Benefit. This may explain why the rules are complex and the CRA is strict.  Obviously, Canada can only afford to give these credits to its own residents.  This case deals with the test for residence in Canada. Mr. Bower was from Nova… Read More »Bower (2013 TCC, Bocock) – To get CCTB and GST tax credit refunds, you must be a Canadian resident