Mr Douglas McCarthy participated in the Fiscal Arbitrators fiasco. His lawyer, as part of some pre-trial skirmishing, tried to argue, among other things, that Mr McCarthy shouldn’t have to answer questions on examinations-for-discovery because the discovery process amounts to torture.…
No bcc to clients!
Should you cc or bcc your client on an email to opposing counsel? It’s a trick question: you shouldn’t do either of these things. Instead, you should send the email to opposing counsel and then forward it to your client,…
Amateur lawyers
One of the “arguments” advanced by amateur lawyers who question the legality of the income tax is that no “official” consolidated version of the Income Tax Act, RSC 1985, c 1 (5th Supp), as amended, exists. Because no official version exists, the argument seems to go, the Act must be illegal or unenforceable. This is nonsense of course. An official consolidated version of the Act does exist (see below). Moreover, validity does not require consolidation.
T1135 assessments
Marlene Cepparo, “Form T1135 and Part I Tax Return Reassessment” (January 2016) 24:1 Canadian Tax Highlights discusses technical interpretation 2015-0572771I7 (September 15, 2015). A late-filing penalty for a T1135 must be assessed within the normal reassessment period for the year…
55(2) and creditor-proofing
The new purpose tests in section 55 make creditor proofing problematic. The 55(3)(a) exception remains, however, for deemed dividends. Perhaps it’s possible, then, to achieve creditor proofing by engaging in a 55(3)(a) butterfly. Not so fast. The CRA’s comments at…
45(3) elections and the principal residence exemption
If you buy a home and then change its use, should you always file the 45(3) election to defer any gain? Maybe not, according to James Painter, “Principal-Residence Tax-Deferral Election May Be Inadvisable” (Feb 2016) 6:1 Canadian Tax Focus. Mr…
Employee theft
Mark Tonkovich, “Theft by Owners or Senior Employees: Deductibility of Losses” (Feb 2016) 6:1 Canadian Tax Focus, analyzes employee theft as discussed in Income Tax Folio S3-F9-C1, “Lottery Winnings, Miscellaneous Receipts, and Income (and Losses) from Crime”. The Folio sets…
Section 160 and shareholder benefits
Can the Minister assess a taxpayer under section 160 in respect of an amount already included in the taxpayer’s income under subsection 15(1)? From Justice Bocock, in Parihar v R, 2015 TCC 52 at ¶45: shareholder who has been…
Unpaid income tax and bankruptcy
In Schnier v Canada (Attorney General), 2016 ONCA 5, the Court held that an amount of tax owing (about $4.4 million) was a contingent claim because the relevant assessments were under appeal to the Tax Court. As a result, the…
A simpler T1135
My thanks to Fred Buzzelli, who sent me a link to a good article by Gabe Hayos on the simplified T1135.