English Language Articles
You might think that “foreign reporting” applies only to property located outside Canada. But “specified foreign property" for reporting purposes includes publicly traded shares or bonds of US and other non-resident corporations, even where those bonds and shares are held in Canadian brokerage accounts. If you are assessed penalties for not filing, the November 2016 CPA Canada Tax Newsletter discusses some defences. It also discusses CRA's approach to calculating the $100,000 threshold for property jointly owned by spouses. CPA Canada: Tax Newsletter "T1135 Foreign Reporting — An Update on CRA Technical Interpretations" (November 2016).
For a summary of some recent CRA technical interpretation letters, see the June and July 2015 CPA Canada Tax Newsletters ("The CRA Claims it can Make a Late Reassessment to Increase Tax After an Earlier Arbitrary Assessment"; "An Employee Cannot Reduce a Prior Year Taxable Benefit by Reimbursing the Employer in a Later Year"; "Retroactive Support Amount — Are the Receiving Spouse’s Drawings on a Line of Credit Account Deductible?"; "Crowdfunding — Must Start-Ups Pay Tax on Money Raised Online?")
For a summary of some recent decisions of the Tax Court of Canada dealing with reassessments and appeal limits, read this article, a version of which appeared in CPA Canada's November 2014 Tax Newsletter: Tax Court Round-Up: Reassessment and Appeal Limits
CRA's foreign property reporting form has become more complicated for accountants to fill out, making it more expensive for clients to file. Many taxpayers don't realize how important it can be to file the return especially with new rules extending reassessment periods. Read the article in the June 2014 tax newsletter of CGA Canada: The T1135 — Why Bother?
Can the Federal Court tell the Tax Court which cases it must hear? Read the case comment on Conocophillips Canada Resources Corp. v. Canada in the February 2014 Canadian Tax Highlights: FC Decides TCC Jurisdiction? (See also now the FCA decision over-turning the FC: Canada (National Revenue) v. Conocophillips Canada Resources Corp. 2014 FCA 297.)
If your employer withholds taxes from your pay but doesn't send the money to CRA, you still must pay the taxes to the Government. Your only choice may be to sue your employer for the amount withheld but not remitted. The same can happen to you if CRA garnishes your wages and the employer keeps the money from you but doesn't send it to CRA. Read the article in the July 2013 Canadian Tax Highlights: No Credit for Tax Withheld
Unregistered equitable interest, such as loans secured by real property or spousal rights in commercial properties can have priority over CRA's registered liens for unpaid taxes. Read the case comment in the February 2013 Canadian Tax Highlights on Trang v. Nguyen
Surprisingly, the smaller 10% penalties for failing to report income are more expensive than the 50% penalties for knowingly under-reporting income. But there may be a defence, if you can show you tried to file correctly. Read the article in the June 2012 Canadian Tax Highlights Lower Penalties Cost More
Most public regulatory bodies in Canada (such as provincial colleges of medicine or dentistry, or law societies and chartered accountant institutes) claim tax exemption as "non-profit organizations." But this exemption demands that the regulator have no profit and that it not be able to distribute property or pay dividends to its members. A less restrictive exemption for these bodies may be available on the basis that they are "public bodies performing a function of government in Canada." Read the article in the October 2011 Canadian Tax Highlights on Public Regulators and the Exemption under paragraph 149(1)(c) of Canada's Income Tax Act
For an article summarizing criteria CRA applies for selecting taxpayers for GST and Income Tax Audit, read CPA Canada: Tax Newsletter "CRA Audit Triggers" (January 2017).
For an examination of the Tax Court of Canada rule on access to evidence in discovery, see "The Scope of Oral Discovery--Questions Relating to Evidence" in Tax Litigation, the Federated Press, Volume XIX, No.3 (August 2015), (pp. 1166-1168). Summary: There is a common view among the bench and bar, affirmed in recent decisions, that parties to discovery may not ask questions that seek evidence. This common view traces to an historical distinction between questions of fact (permitted) and questions of evidence (forbidden). Notwithstanding that common view, rule 95 of the Tax Court of Canada's General Procedure Rules, like the rules of the Federal Court and of the provinces, expressly forbids a party from objecting to a question on the basis that it seeks evidence. This article traces the origin of the current rule to 1985, when the former distinction between questions of fact and evidence was abandoned in Ontario and details the thinking that gave rise to the introduction of the current rule in Canada.
Do-It-Yourself Accounting can be Costly. Read why in CGA Canada's August 2014 Tax Newsletter: How Do-It-Yourself Accounting can be Costly for Clients
Can you get a tax donation receipt for donating blood or organs? Read the article in Carswell's June 2014 issue of Canadian Not-for-Profit News: Tax Credit for Donations of Blood and Body Parts? (Republished in Carswell's December 18, 2015 issue of The Canadian Taxpayer (Vol. xxxvii No. 24.)
Charity scams: their evolution, the CRA’s battle against them, new rules announced in 2013 by Parliament to crack down on them, recent tax court cases, and class action lawsuits. Read the article in the January 2014 tax newsletter of CGA Canada: Charity Scams — What You and Your Clients Should Know
Some businesses use software (called "zappers") to delete cash sales, to evade payment of income taxes and GST. New federal laws will make the manufacture, sale, use or ownership of this software illegal. Read the article in CGA Canada's November 2013 Tax Newsletter: Are Your Clients Zapping?
If you are crossing the border with $10,000 or more, you must declare it or risk having CBSA officers seize it all. Once seized, unless you can prove that the money is not "proceeds of crime", you may never get it back. If you fear a CRA audit, it's better to risk the audit than lose the money and still risk the audit. Read the article in the April 2013 Canadian Tax Highlights on the Proceeds of Crime (Money Laundering) and Terrorist Financing Act.
Are provincially-owned corporations taxable under Part I of the federal Income Tax Act? In a recent Tax Court of Canada case, the court and parties assumed that the Credit Union Deposit Insurance Corporation of British Columbia is taxable under s. 137.1 of the Income Tax Act. But these provincially controlled corporations may be exempt from this tax under s. 149(1)(d) of the Income Tax Act or, as Crown agents, under s. 17 of the federal Interpretation Act. Read the article in the December 2012 Canadian Tax Highlights on Public-Controlled Corporation Taxable?
The Canada Revenue Agency has garnishment powers that aren't subject to the usual provincial protections against seizure of certain property. In particular, there is no limit to the amount of wages the CRA may garnish from a taxpayer's employer. Read the case comment in the January 2012 Canadian Tax Highlights on Federal Tax Garnishment
The taxpayer has the onus of proof in tax cases but, sometimes, oral evidence may be enough proof even without supporting documents. Read the case comment in the September 2011 Canadian Tax Highlights on House v. The Queen
Chinese Language Articles
Can CRA find unreported income?
What if you do not file a tax return? Or what if you file a tax return but you do not show all your income? The Canada Revenue Agency has several ways to find or estimate unreported income.
Click here to read the Article, as it appeared in Ming Pao's Saturday Magazine - 02 February 2013
House Flipping is Taxable
Some people buy new houses to sell for a profit without paying tax. If CRA finds these “speculators”, usually it charges them income tax, penalties and interest on their profits.
Click here to read the Article, as it appeared in Ming Pao's Saturday Magazine - 09 February 2013
“Zapper Software” – Can CRA make deleted cash-register sales reappear?
Since the mid-1990s, businesses have used “zapper software” to delete or “zap” sales from their electronic cash registers. Some “zapper” software is so good that CRA computer specialists may not be able to prove that sales were deleted. But CRA has other ways to discover whether a restaurant or store has hidden sales.
Click here to read the Article, as it appeared in Ming Pao's Saturday Magazine - 16 February 2013
You can’t take money from your corporation without paying tax
Shareholders own the shares of corporations. But the shareholders do not own the corporation’s property. And the shareholders do not have a right to the corporation’s profits until the corporation pays a “dividend”. These rules confuse many small business owners who think that because they own the corporation’s shares they have a right to its money and other property. But if you take your corporation’s money, without paying tax on it, CRA may charge you extra tax, penalties, and interest.
Click here to read the Article, as it appeared in Ming Pao's Saturday Magazine - 23 February 2013
If you're crossing the border with $10,000 or more of cash, report it to CBSA or risk losing it.
If you're traveling to or from Canada with $10,000 or more of cash or negotiable instruments, the federal Proceeds of Crime and Terrorist Financing law says you must report it to the Canada Border Services Agency. If you don't report, the CBSA officers can take your money and you can only get it back if you prove it's not proceeds of crime (such as unreported taxable income). This is hard to prove. It's much better to report the money and risk a CRA audit than not to report, have the money taken, and still face a CRA audit.
Click here to read the Article, as it appeared in Ming Pao's Saturday Magazine - 18 May 2013
Visitors to Canada do not pay duties on their personal belongings but they must declare them.
As a general rule, there is no duty payable on goods that a visitor imports for personal use and that are appropriate for the person’s needs and consistent with the purpose, nature and duration of her intended stay in Canada. But a visitor must still fill out the CBSA customs declaration form.
Click here to read the Article, as Ming Pao published it in its Saturday Magazine - 25 May 2013