Retiring allowance exception

In Rae v. The Queen, 2010 TCC 130, the taxpayer left his position as the controller of one corporation and joined another. Soon after he started his new employment, he discovered what he thought were serious improprieties in the financial statements and accounting practices of his new employer. He resigned his position but then negotiated a settlement under which he received a large payment for negligent misrepresentation and as damages for retaliation. The CRA took the position that the entire amount received was a retiring allowance. The taxpayer appealed; the Tax Court agreed with him in part.

Assessments

In Danso-Coffey v. Ontario, 2010 ONCA 171, the Ontario Court of Appeal considered whether Ontario could assess and collect tax from an individual who was supposedly a director of a corporation when, it turned out, she wasn’t. The Court concluded that Ontario could assess and collect the tax if the individual failed to follow the appropriate procedures in the Retail Sales Tax Act (the “RSTA”) for disputing the assessment.

Tax Court Jurisdiction

In Sorbara v. Canada (Attorney General), 2009 ONCA 506, the Ontario Court of Appeal held that the Ontario Superior Court of Justice does not have jurisdiction to hear an application relating to liabilty for GST under the Excise Tax Act (Canada). Parliament has given exclusive jurisdiction over that kind of question to the Tax Court of Canada. The appellant’s application for leave to appeal to the Supreme Court of Canada was dismissed with costs (2009 CanLII 61389).

Criminal Minds

Mr. Mortensen was convicted of tax evasion in respect of some commissions he earned but failed to report. He filed an appeal with the Tax Court, and the Crown responded by bringing a motion to dismiss the appeal. The taxpayer, the Crown argued, shouldn’t be permitted to contest the tax owing and the gross negligence penalties imposed in respect of amounts for which he had been convicted of evasion.