A taxpayer can avoid the rather harsh penalties potentially applicable under subsection 163(1) of the Income Tax Act (the “missing T-slip penalty”), if the taxpayer can show that the error in question—the failure to report income—occurred despite the taxpayer’s due…
Henry IV, Pt 1 in news about tax
It’s not every lawyer who can plausibly quote Henry IV, Part 1, in an article on tax matters, but Neal Armstrong pulls it off in a recent post about MNR v Sifto Canada Corp, 2014 FCA 140. In Sifto, Sharlow…
“Privileged and Confidential”
I’ve always been skeptical of the value of those lengthy paragraphs at the end of many email messages sent by professional firms that are meant to claim privilege, confidentiality and your first-born if you are the accidental recipient of the…
Shares issued for a note
Neil Armstrong, in a recent News of Note article, summarizes an article by Marshall Haughey (“Issuing Shares for a Promissory Note,” 24 Can. Current Tax, May 2014, p. 85), in which the author concludes that shares supposedly issued for a…
A Warning from the Court
The following article on the tax preparer penalties appeared in a recent issue of the HLA Journal.
The “third-party civil penalties” in the Income Tax Act (the “Act”) have been with us for some time now. When they were first introduced, they caused some consternation because they made tax advisers potentially liable with their clients for penalties for misstatements on tax returns. In my experience, these penalties have had the effect Finance was looking for when it introduced the penalties: most of the accountants with whom I deal are quite cautious when it comes to circumstances that might involve the application of the penalties. Perhaps they would be cautious anyway, but it is a rare discussion about a questionable or aggressive filing position for which a client is advocating where the accountant does not mention these penalties.
NPO Report
Interested readers can find the CRA’s “Non-Profit Organization Risk Identification Project Report” here.
New Folio on Arm’s Length
The CRA has published Income Tax Folio S1-F5-C1 (“Related persons and dealing at arm’s length”) to replace Interpretation Bulletin IT-419R2 (“Meaning of Arm’s Length”). It’s a must-read for those of us who must grapple with the arm’s length concept.
Excess capital dividends
Paul Hickey, in Canadian Tax Highlights (22:3, March 2014), notes that the CRA recently confirmed that it will defer processing an election to treat an excess capital dividend as a separate taxable dividend until any related objection under Part III…
Guilty pleas and the Tax Court
James Rhodes, in a recent post on the Canadian Tax Professionals group on LinkedIn, drew our attention to McIntrye v R, 2014 TCC 111, in which Justice Diane Campbell, among other things, found that the CRA was not bound by an agreed statement of facts (ASF) arrived at as part of a plea bargain and that the CRA, in assessing the taxpayers, was not required to make assumptions that were consistent with the ASF.
PAC Update
As noted previously on this blog, the CRA updated its Income Tax Folio S4-F3-C1 on price adjustment clauses (PACs) in January. I’ll probably do a longer post later on how this folio updates the CRA’s IT bulletin on PACs. For…