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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

Harvey v. The Queen, (2014 TCC Graham) (Costs order)–CRA can’t agree to a settlement offer based on waiving part of a penalty

Tax Court rules allow the Court to order the defeated party to pay some of the other’s legal fees.  The Court has broad discretion in the amount it orders.  (See Spruce Credit Union v. The Queen, (2014 TCC Boyle) (Costs order).)  In deciding how much to order for a costs award, the Court will consider whether a party made a settlement offer which the other side… Read More »Harvey v. The Queen, (2014 TCC Graham) (Costs order)–CRA can’t agree to a settlement offer based on waiving part of a penalty

Spruce Credit Union v. The Queen, (2014 TCC Boyle) (Costs order)–$400,000 of legal costs for 2700 hours of work (on principle)?

The TCC has the power to award costs to a successful party.  There are limits on this discretion for Informal Procedure appeals but much more flexibility under r. 147 of the General Procedure rules. In this case, Justice Boyle made the extraordinary costs award of about $410,000 (subject to adjustments for a motion and three discoveries).  This was about 1/2 the Appellant’s lawyers’ billed fees of… Read More »Spruce Credit Union v. The Queen, (2014 TCC Boyle) (Costs order)–$400,000 of legal costs for 2700 hours of work (on principle)?

Ontario v. $10,000.00 in Canadian Currency (In Rem), (2014 ONSC Ellies) — If the police stop you, they can keep your property

Suppose the police stop you and find you have $10,000 in cash in your pocket.  Can they keep it?  Maybe.   If you commit a crime, you may be fined or imprisoned.  But normally, the government must prove your guilt beyond a reasonable doubt and under very strict prosecutorial rules.   But since the mid-1980s in the US, and more recently in Canada, governments have… Read More »Ontario v. $10,000.00 in Canadian Currency (In Rem), (2014 ONSC Ellies) — If the police stop you, they can keep your property

Rochefort v. The Queen, (2014 TCC C. Miller) — You can get the GST/HST New housing rebate even if a friend goes on title to help with mortgage financing

Suppose you sign an agreement of purchase and sale to buy a new home.  But the bank insists that you have a co-signor for the mortgage and put him or her on title.  Your friend agrees to co-sign, not expecting to pay anything on the mortgage or to have any real interest in the new home.  You move in.  Can you still get the GST/HST… Read More »Rochefort v. The Queen, (2014 TCC C. Miller) — You can get the GST/HST New housing rebate even if a friend goes on title to help with mortgage financing

Canada v. Berg, (2014 FCA Near) — You can’t get a tax credit that exceeds the true cost of your gift

If you make a donation of property to a charity at inflated values solely to get tax credits that exceed your out-of-pocket costs, have you made a gift?  No.  Are you entitled to donation tax credits?  No.   Mr. Berg “invested” in a charity scam.  He gave a Canadian charity “Cheder Chabad” offshore time share units for a receipt which was about 10 times his… Read More »Canada v. Berg, (2014 FCA Near) — You can’t get a tax credit that exceeds the true cost of your gift

Higgins v. Canada (Attorney General), (2014 FC Phelan) — Don’t expect interest or penalty relief if you commit tax evasion

Suppose you’re guilty of tax evasion.  Could you get interest and penalty waived from your tax debt on the basis of financial hardship?  You might.  Well, what if you can’t show financial hardship, could you still get interest and penalty waived for “financial hardship”?  No, of course not.   “[3]   In 2009 the Applicant pled guilty to wilfully evading payment of income taxes by failing… Read More »Higgins v. Canada (Attorney General), (2014 FC Phelan) — Don’t expect interest or penalty relief if you commit tax evasion

Doulis v. The Queen, (2014 TCC Lamarre) — You can’t deduct interest you owe for unpaid taxes

Suppose you don’t pay your taxes but keep the money, instead, to invest and earn more taxable income.  Can you deduct the interest you owe for the unpaid tax?  No. Normally, you can deduct interest you owe on “borrowed money used for the purpose of earning income from a business or property”.  (ITA s. 20(1)(c)(i).)  And why not?  We shouldn’t charge you tax on what you… Read More »Doulis v. The Queen, (2014 TCC Lamarre) — You can’t deduct interest you owe for unpaid taxes

Sirivar v. The Queen, (2014 TCC Hogan) — Moving for work?  You can sleep or eat but you cannot deduct both for more than 15 days.   

If you sleep and eat during your move, you can only claim the expenses for 15 days.  But if you only eat or sleep but not both, you can deduct as long as you take.  Does that make sense? This is an unusual case.  First, the taxpayer appealing was a CRA Appeals officer at the time of the appeal.  (He retired in March 2012).  One… Read More »Sirivar v. The Queen, (2014 TCC Hogan) — Moving for work?  You can sleep or eat but you cannot deduct both for more than 15 days.   

Mould v. The Queen, (2014 TCC Rip CJ) — You can examine a non-party to get information before your hearing — if the Court agrees

This is appeal involves investors in a software partnership loss scheme from the early 2000s.  The appellants were investors, whose tax losses CRA denied.  In General Procedure cases, the parties can “discover” one another in writing or orally (subject to restrictions for appeals where $50,000 or less of tax is at issue.)   The taxpayers couldn’t answer the government’s questions during discovery.  They were investors;… Read More »Mould v. The Queen, (2014 TCC Rip CJ) — You can examine a non-party to get information before your hearing — if the Court agrees

9120-1616 Québec Inc. c. La Reine, (2014 CCI Favreau)–If your reported sales don’t match CRA’s estimates, you may have to pay extra tax, GST, penalties and interest

If you don’t report all the sales in your point of sale system and your alcohol purchases by volume exceed what you reported you sold, (as inferred from your reported sales and your average sale prices), can CRA or Revenue Quebec estimate the unreported sales and assess you for unreported GST/HST/QST?  Yes.   This was another restaurant case where Revenue Quebec estimated that the restaurant… Read More »9120-1616 Québec Inc. c. La Reine, (2014 CCI Favreau)–If your reported sales don’t match CRA’s estimates, you may have to pay extra tax, GST, penalties and interest

George v. The Queen, (2014 TCC Lamarre)–You can’t get GST input tax credits without valid receipts (or, at least, a credible story)

If you don’t have receipts showing a valid GST registration number, you can’t prove that you didn’t claim the credits in prior years, and you don’t have receipts for all your claimed credits, can you still claim input tax credits?  If the Court believes that you had valid receipts at the time you filed your returns, you might still be able to get the credits.… Read More »George v. The Queen, (2014 TCC Lamarre)–You can’t get GST input tax credits without valid receipts (or, at least, a credible story)

Prochuk v. The Queen, (2014 TCC D’Auray)–Active trading in your RSP is not a business

If you trade shares actively in your RSP but later invest outside the RSP in a fund that pays a high annual return, does your RSP trading history allow you to claim a loss on the fund as a “business” loss?  No.   Mr. Prochuk made about $100,000 a year over a 13-year period, trading shares in his RSP account.  He lived on that return.… Read More »Prochuk v. The Queen, (2014 TCC D’Auray)–Active trading in your RSP is not a business

Cantin c. La Reine, (2014 CCI Masse)–You can’t split long-term disability payments with your spouse

Can you split long-term disability payments with your spouse, just as you can split the pension amounts you get?  No.   In 2009, Mr. Cantin got about $16,000 from Hydro-Quebec’s long-term disability insurer.  He tried to split that amount with his wife, to reduce income.  He relied on ITA s. 60.03 which allows you to reduce your taxable income for a year by splitting your “eligible pension income”… Read More »Cantin c. La Reine, (2014 CCI Masse)–You can’t split long-term disability payments with your spouse

Affordable Sign Service Ltd v. The Queen, (2014 TCC Woods)–You must have a real loss to claim an “allowable business loss”

If you invest $100,000 in a business run by a man later proven to be a fraud, and you claim you lost your $100,000 but you write off the debt within days of its becoming due, you take no action to collect it, and you’re still speaking with the fraudster, may you claim an “allowable business investment loss” and reduce your income for the year… Read More »Affordable Sign Service Ltd v. The Queen, (2014 TCC Woods)–You must have a real loss to claim an “allowable business loss”

Mallon v. M.N.R., (2014 TCC C Miller) — You can be an employee even if you don’t want to

Can a person be an employee even if he and his employer agree he’s an independent contractor?   Yes.   Mr. Mallon was a salesman for his employer.  Unlike many of these EI-CPP disputes, where the worker claims to be an employee but the business says he was an independent contractor, here the parties’ “description of the work, of the arrangement and the contract was… Read More »Mallon v. M.N.R., (2014 TCC C Miller) — You can be an employee even if you don’t want to

Persaud v. The Queen, (2013 TCC Woods) — A premature objection can be valid

Suppose CRA sends you a letter saying it will not allow a deduction or credit you claim and, thinking that is a reassessment notice, you file a letter objecting to it.  Four months later, CRA sends you the formal reassessment notice but, having already filed your objecting letter, you don’t send anything more.  Was your earlier letter a valid objection to the formal notice of… Read More »Persaud v. The Queen, (2013 TCC Woods) — A premature objection can be valid

Cogesco Services Limited c. Canada (2013 CF Roy) — CRA must at least address your reasons if it denies you interest or penalty relief

Suppose you didn’t file tax returns because you had no tax payable and, at the time, the Tax Court had said there was no penalty for a non-resident not filing returns if it had no tax payable.  Later, though, in another case, the FCA over-turned the Tax Court views, saying a different penalty rule still applied.  So, CRA assessed you a failure to file penalty. … Read More »Cogesco Services Limited c. Canada (2013 CF Roy) — CRA must at least address your reasons if it denies you interest or penalty relief

Qian v. The Queen, (2013 TCC Favreau) — Forced to act as a director for a company you don’t control, to save your job, you could be liable for payroll taxes

You’re a bookkeeper.  Under threat of losing your job, you agree to your employer’s demands that you buy a small share interest and act as a director of the company.   You try to prevent what you see as bad management but the real shareholders ignore you. The company fails to make its payroll remittances. CRA goes after you for the unremitted payroll amounts.   Are you liable?… Read More »Qian v. The Queen, (2013 TCC Favreau) — Forced to act as a director for a company you don’t control, to save your job, you could be liable for payroll taxes

Salari Kamangar v. The Queen, (2013 TCC V. Miller) — If the TCC gives you an extension of time to file an appeal but you don’t bother, you can lose your appeal right

The taxpayer missed the deadline for filing a Notice of Appeal.  His accountant represented him at Court and got an extension of time allowing him to file a proper Notice of Appeal in 30 days.  They did nothing for 600 days.  Then, discovering that CRA was collecting the taxes due for the appealed years, they applied to the TCC for another extension of time.  The… Read More »Salari Kamangar v. The Queen, (2013 TCC V. Miller) — If the TCC gives you an extension of time to file an appeal but you don’t bother, you can lose your appeal right

Strachan v. The Queen, (2013 TCC Rip CJ) —  If you let your spouse buy shares in your corporation for less than fair value, your spouse can be liable for your tax debts

If you have your corporation issue shares to your spouse for less than fair market value, have you “transferred” something valuable to your spouse?  Yes, you gave up a share of the value of the corporation.  So, if you owed taxes at the time of the share issue, your spouse must pay your tax debts up to the value of the shares (less what your… Read More »Strachan v. The Queen, (2013 TCC Rip CJ) —  If you let your spouse buy shares in your corporation for less than fair value, your spouse can be liable for your tax debts

Torres v. The Queen, (2013 TCC C. Miller) – “Fiscal Arbitrators” – Do not suppose that because someone else got a refund with a tax scheme that you can too — CRA might just have made a mistake

As Justice Miller said, “This is a sad and sorry tale of taxpayers … who are just six of many taxpayers who were led down a garden path, with the carrot at the end of the garden being significant tax refunds. The tax refunds were the result of claiming fictitious business losses.”  (Para. 2.) The tax scheme made no sense but the participants didn’t question… Read More »Torres v. The Queen, (2013 TCC C. Miller) – “Fiscal Arbitrators” – Do not suppose that because someone else got a refund with a tax scheme that you can too — CRA might just have made a mistake

Kossow v. Canada, (2013 FCA Near) — You can’t get a tax deduction for giving nothing.  

The charity, effectively, got only about 0.5% of the cash donations in this scheme.  Promoters would get most of the rest, net of money set aside to fight the CRA.  For that, the participants in the program expected to get about 18% more in tax credits than the cash amount they paid.  So, the scheme was funded by the Government of Canada through tax credits… Read More »Kossow v. Canada, (2013 FCA Near) — You can’t get a tax deduction for giving nothing.  

Transalta Corporation v. Canada, (2013 FCA Blais CJ)  — If you make a settlement offer to CRA, you can get extra costs at trial — but only if CRA could legally accept the offer

Courts in Canada can “award costs” to the successful party.  These awards make the opposing party pay some of the legal expenses of the successful party, on the basis that the losing party should not have pressed its objections so far.  One of the goals of these awards is to encourage parties to settle without going to a trial (or appeal), using up the court’s… Read More »Transalta Corporation v. Canada, (2013 FCA Blais CJ)  — If you make a settlement offer to CRA, you can get extra costs at trial — but only if CRA could legally accept the offer

Tatiana Baran (Re), (2013 ONSC DM Brown) – If you declare bankruptcy without objecting to a CRA reassessment, your higher tax debts may affect your discharge

If a CRA auditor wrongly assesses you for $850,000 of tax, interest and penalty because the auditor refused to recognize your temporary employment agency’s employee expenses, and, instead of filing an objection with the CRA, you file an assignment in bankruptcy, can you challenge the CRA’s wrong assessment through the bankruptcy process?  No.  The result will be that you will have higher debts than you should… Read More »Tatiana Baran (Re), (2013 ONSC DM Brown) – If you declare bankruptcy without objecting to a CRA reassessment, your higher tax debts may affect your discharge

Nottawasaga Inn Ltd. v. The Queen, (2013 TCC Pizzitelli) – You can’t use loss carrybacks to eliminate a tax debt, but then appeal the tax debt

This is an odd technical case.  It turns on the rule that you can’t appeal a “nil assessment” — i.e., one which says you don’t owe taxes.  But it can affect how you think about whether you should object to a reassessment or, instead, ask CRA to amend your return.   CRA reassessed Nottawasaga for about $150,000 in extra income. Half of that arose because CRA thought… Read More »Nottawasaga Inn Ltd. v. The Queen, (2013 TCC Pizzitelli) – You can’t use loss carrybacks to eliminate a tax debt, but then appeal the tax debt

Global Cash Access (Canada) Inc. v. Canada, (2013 FCA Sharlow) — Financing fees aren’t subject to GST, if the fees are paid to someone for disbursing cash to your clients

Say you’re at a casino (or anywhere else) and you get a cash advance voucher from a cash kiosk and the casino gives you the cash.  You pay a fee for that service and the kiosk company pays a fee to the casino (or store, etc.).  You don’t pay GST on the financing fee.  But should the cash advance company pay GST on its fee to… Read More »Global Cash Access (Canada) Inc. v. Canada, (2013 FCA Sharlow) — Financing fees aren’t subject to GST, if the fees are paid to someone for disbursing cash to your clients

Karam v. The Queen, (2013 TCC D’Arcy) — It’s not how many witnesses you have but how credible you are.  Witnesses can’t overcome documents.

If you have twenty-two witnesses, including an expert, can you still lose your case?  Yes.   It’s not how many witnesses you have but how credible you are.   “[43] I did not find the Appellant to be a credible witness. … on several occasions, the objective evidence before the Court contradicted his oral testimony.” The issue that faced Mr. Karam “was whether the substantial gain… Read More »Karam v. The Queen, (2013 TCC D’Arcy) — It’s not how many witnesses you have but how credible you are.  Witnesses can’t overcome documents.

Carson v. The Queen, (2013 TCC C. Miller) — You might be able to get a tax credit for giving a charity a right to use your property

Can you get a tax receipt for giving a charity free rent at your property? Possibly.   You might be able to get a receipt if: (a) you take the rent and donate it back to the charity (including the rent in income, then claiming the donation tax credit against the tax payable) or  (b) you give the charity a formal lease, giving it a… Read More »Carson v. The Queen, (2013 TCC C. Miller) — You might be able to get a tax credit for giving a charity a right to use your property

Cheikhezzein v. The Queen, (2013 TCC  Bocock) — It doesn’t matter how wrongly CRA conducted the audit; only whether the assessment was wrong

Can a Tax Court judge invalidate CRA’s tax assessment against you because during the audit the CRA officers arbitrarily searched and seized your property, abused their powers in the process of assessing you, and seized your property without legal due process?  No.   You can challenge an assessment only by showing that the amount assessed is wrong on the facts or the law, (including that… Read More »Cheikhezzein v. The Queen, (2013 TCC  Bocock) — It doesn’t matter how wrongly CRA conducted the audit; only whether the assessment was wrong

Vachon c. La Reine, (2013 CCI Tardif) — If your accountant steals your money instead of sending it to CRA, you must still pay the tax but probably not the penalties

If, through lack of vigilance, blindly and imprudently you let your accountant defraud you by keeping your money instead of sending it to CRA, but you weren’t secretly or expressly involved in or benefiting from his stratagems, are you liable for gross negligence penalties for his failures to accurately report and pay your taxes?  No.  (Paras. 74 and 82) Though an experienced business man and… Read More »Vachon c. La Reine, (2013 CCI Tardif) — If your accountant steals your money instead of sending it to CRA, you must still pay the tax but probably not the penalties

Vicars v. The Queen, (2013 TCC, V. Miller) — You must have records to challenge a net worth assessment

If the CRA finds your  records unreliable and estimates your business income based on the deposits to your bank accounts and on your personal expenses, such as mortgage payments (called a “net worth assessment”), can you overturn the assessments by claiming you had good records and that your business couldn’t have made so much money, without proving your claims with documents?  No.   This decision… Read More »Vicars v. The Queen, (2013 TCC, V. Miller) — You must have records to challenge a net worth assessment

Mast v. The Queen, (2013 TCC Angers) — You can borrow money from your corporation to buy a house, but the loan must be on reasonable terms and for no more than an employee could borrow 

If (a) you have your corporation lend you, interest-free and unsecured, “a very substantial part of [its] retained earnings” to build your home,  (b) you only must repay 5% a year over ten years, starting in the 4th year of the loan, and  (c) you show the loan in the corporation’s books as a “loan receivable – shareholder”,  is that a tax-free employee housing loan, or is it a… Read More »Mast v. The Queen, (2013 TCC Angers) — You can borrow money from your corporation to buy a house, but the loan must be on reasonable terms and for no more than an employee could borrow 

Hanson v. The Queen, (2013 TCC Woods) — If you miss the 1-year extension deadline to file your notice of objection, you lose your right to object and appeal; there is no exception

Suppose you miss the normal 90-day deadline for filing your objection and also you miss the 1-year deadline for asking for an extension, but you have very good excuses for your failure, what can you do?  Nothing.   The FCA has been clear:  Tax Courts have no power to extend the objection deadline beyond the statutory 90 days plus 1 year, no matter how compelling… Read More »Hanson v. The Queen, (2013 TCC Woods) — If you miss the 1-year extension deadline to file your notice of objection, you lose your right to object and appeal; there is no exception

Casa Blanca Homes Ltd. v. The Queen, (2013 TCC Hogan) — GST — Courts will interpret tax laws to avoid double taxation

If you have two ways to interpret a contract, should you read it so that GST will apply twice or only once?  Hogan J. says, choose the “interpretation [that] avoids double taxation”.  (Para. 25.) Casa Blanca agreed to buy 14 parcels of land from a developer.  It paid a deposit for each purchase.  Then, for 12 of the properties, Casa Blanca assigned its purchase rights to… Read More »Casa Blanca Homes Ltd. v. The Queen, (2013 TCC Hogan) — GST — Courts will interpret tax laws to avoid double taxation

Tassone v. Canada (National Revenue), (2013 FC Gleason)  — If you’re a collection risk, CRA can take collection action without telling you or waiting for you to have a chance to object to the assessment

If you have not reported income for 8 years, though you tell your bank and other creditors that you earn hundreds of thousands, and though you have properties offshore, unexplained deposits to your bank account, and CRA thinks you owe $5 million in taxes, may CRA put a lien on your $1.2 million home to prevent you from escaping collection, without first giving you a… Read More »Tassone v. Canada (National Revenue), (2013 FC Gleason)  — If you’re a collection risk, CRA can take collection action without telling you or waiting for you to have a chance to object to the assessment

D & D Livestock Ltd. v. The Queen, (2013 TCC Graham)  — You can pay a dividend of the same profits twice, tax-free, to save extra capital gains tax, despite the ITA anti-avoidance rule

A dividend is a distribution of a corporation’s profits.  This case asks: Can you distribute the same profits twice, tax-free, despite the anti-avoidance rule in ITA s.  55?  Justice Graham says: Yes, you can.    Income tax rules allow dividends to pass tax free from one Canadian corporation to another.  Why?   Because the paying corporation (or a company from which it got the money as a… Read More »D & D Livestock Ltd. v. The Queen, (2013 TCC Graham)  — You can pay a dividend of the same profits twice, tax-free, to save extra capital gains tax, despite the ITA anti-avoidance rule

Hrushka v. The Queen, (2013 TCC Woods) — if your child lives primarily with your spouse under a written agreement or court order, probably you can’t claim the Child Tax Benefit and GST refundable credit

If your child lives with your separated spouse most of the time under a court order, can you claim the Child Tax and GST refundable credits?  Probably not, unless you could show that, even though the child lives more with your spouse, you are “the parent who primarily fulfils the responsibility for the care and upbringing of the [child]”.   (See the definition of “eligible individual”… Read More »Hrushka v. The Queen, (2013 TCC Woods) — if your child lives primarily with your spouse under a written agreement or court order, probably you can’t claim the Child Tax Benefit and GST refundable credit

Vivaconcept International Inc. c. La Reine, (2013 CCI Tardif) — You can recover GST net tax on a bad debt either by writing it off or by issuing a credit note

Can you claim a reduction in your net tax for GST/HST/QST if you write off a contract debt where there was no payment made for a year, the debtor’s directors had declared it insolvent, and it had made an arrangement with suppliers (including you) to avoid bankruptcy?  Sure, under ETA s. 231.   If your written evidence shows that you only wrote off part of the debt,… Read More »Vivaconcept International Inc. c. La Reine, (2013 CCI Tardif) — You can recover GST net tax on a bad debt either by writing it off or by issuing a credit note

Langelier v. The Queen, (2013 TCC Favreau)  — If you move far from work, then move back later without more workload, you can’t deduct the moving expenses from employment income

If you move to a home 60 kilometres from your workplace but four years later you move back to be nearer to your work where you “performed new duties with the same employer at the same business location”, can you deduct the moving expenses from your taxable employment income?  No.   Ms. Langelier moved around a lot but she never changed employers from 1996 to 2012.… Read More »Langelier v. The Queen, (2013 TCC Favreau)  — If you move far from work, then move back later without more workload, you can’t deduct the moving expenses from employment income

Arciresi c. La Reine, (2013 CCI Favreau) — You need a physician’s certificate to claim the medical expense credit. 

Can you claim the medical expense tax credit for a full-time attendant without a medical certificate attesting “that the impairment is a severe and prolonged impairment in physical or mental functions the effects of which are such that the individual’s ability to perform a basic activity of daily living is markedly restricted”?  No.   Though the rules for this credit are complicated, this was an… Read More »Arciresi c. La Reine, (2013 CCI Favreau) — You need a physician’s certificate to claim the medical expense credit. 

Canada (National Revenue) v. JP Morgan Asset Management (Canada) Inc. (2013 FCA, Stratas) — If you don’t like CRA conduct, you can appeal to the TCC or sue, but, generally, you cannot get judicial review

This decision is most interesting to lawyers involved in tax litigation because it details: the proper practice for judicial review applications and  when it’s proper to ask for judicial review in the Federal Court and when, instead, you must file an objection and appeal through the Tax Court of Canada.  CRA taxpayer relief discretion is one of the common areas for judicial review in tax law.… Read More »Canada (National Revenue) v. JP Morgan Asset Management (Canada) Inc. (2013 FCA, Stratas) — If you don’t like CRA conduct, you can appeal to the TCC or sue, but, generally, you cannot get judicial review

Canada c. Lemire, (2013 CAF Noel) and Canada v. 9101-2310 Québec Inc. (2013 FCA Noel) — If your spouse or other non-arm’s length tax debtor uses your account to clear cheques, you could be liable to pay his tax debts.

Suppose your spouse, a child or other “non-arm’s length” person asks you to let him deposit money in your bank account, perhaps because he has no account, creditors are threatening collection action, or the bank holds the funds on deposit too long for his business needs.  Is it safe to help out?  After these two FCA decisions, it seems safer than before, but still it’s… Read More »Canada c. Lemire, (2013 CAF Noel) and Canada v. 9101-2310 Québec Inc. (2013 FCA Noel) — If your spouse or other non-arm’s length tax debtor uses your account to clear cheques, you could be liable to pay his tax debts.

Roby v. Canada (Attorney General) (2013 FCA Sharlow) — If the EI Commission pays you too much by accident, you must repay it; this case was an exception

Mr. Roby, a police officer, was hurt.  He applied for EI.  He qualified.  He gave the EI Commission direct deposit information for his CIBC account.  Then he declared bankruptcy.  So, he asked the EI Commission not to pay the money into his CIBC account (which the bankruptcy trustee now controlled) but to pay it elsewhere instead.  The EI Commission made a mistake; it paid the… Read More »Roby v. Canada (Attorney General) (2013 FCA Sharlow) — If the EI Commission pays you too much by accident, you must repay it; this case was an exception