A casual reading of subsection 63(1) of the Income Tax Act suggests that a taxpayer claiming childcare expenses is required to produce receipts from the person providing the care. The subsection seems to permit the deduction of expenses “the payment of which is proven by filing with the Minister one or more receipts each of which was issued by the payee and contains, where the payee is an individual, that individual’s Social Insurance Number”.
“Received”
In Morrison v. The Queen, 2010 TCC 429 (an informal procedure appeal), the individual taxpayers were employees of a corporation of which they were the controlling shareholders. The corporation purported to pay salary to the taxpayers by remitting amounts on account of source deductions to CRA and crediting the appropriate balance to the shareholders’ loan accounts. The taxpayers, however, didn’t include any amounts in income for the year in which the credits and remittances were made. The CRA reassessed to include all amounts credited and remitted in income; the taxpayers appealed to the Tax Court of Canada.
Creditor Proofing
Professionals who advise their clients to enter into creditor-proofing transactions need to think twice in light of Abakhan & Associates Inc. v. Braydon Investments Ltd., 2009 BCCA 521. In this case, the B.C. Court of Appeal dismissed an appeal from a judgment that, in effect, set aside a species of butterfly transaction under the Fraudulent Conveyance Act, 1996, R.S.B.C. c.163, even though the principal of the distributing corporation “had no dishonest intent, or mala fides, and acted on professional advice to effect legitimate business purposes” [¶2].
Antle and Garron
T1135
Purity
GST44
Marechaux appeal dismissed
Robert Kepes of Morris & Morris LLP reports that the Federal Court of Appeal today dismissed the taxpayer’s appeal in Maréchaux v. The Queen, 2009 TCC 587, a case which I wrote about here. Apparently, the taxpayer’s counsel struggled valiantly, but the Court, after listening to him, took a 15-minute break and then rendered a decision from the bench without hearing from the Justice lawyer.
ASPE is coming!
I just returned from the Canadian Tax Foundation’s Ontario Conference where Ruth Cummings (KPMG LLP) and Jane Bowen (University of Ontario Institute of Technology) gave a presentation on the new standards set out in the “Accounting Standards for Private Enterprises” (ASPE) and the “International Financial Reporting Standards” (IFRS).
CRA Trusts Initiative
I spoke at an Ontario Bar Association conference on October 2 along with David Louis from Minden Gross (among others). David’s presentation included some discussion of the CRA trust audit initiative about which we’ve heard so much. David had contacted the CRA’s Toronto TSO about the initiative, and it told him the following: