Effective. Accessible. Responsive
I am back from holidays now and back to having to deal with the many-headed Hydra that is the CRA.
Over the last few years the CRA has been “rationalizing” its services to cut costs and, supposedly, improve its services. A recent example of these changes is the reduction of services available at the counters at tax services offices. The CRA explains this change as follows:
Under the Income Tax Act (Canada) (the “Act”) significant tax advantages may be available to a professional who derives his or her income through a corporation, of which he or she is both a shareholder and an employee, rather than directly from a practice operated in his or her name.
Chief Justice Bowman of the Tax Court of Canada just does not like tax shelters much. He has released a number of decisions over the last few years in which he has ruled against taxpayers who purchased shelters of one kind or another. Makuz v. The Queen, 2006 TCC 263, is another recent example.
Crystal Beach Park Limited v. The Queen, 2006 TCC 183 is an interesting case with some local roots
When can a taxpayer deduct fees paid to contest an assessment or reassessment? As is usual in tax matters, the answer is neither simple nor obvious.
Some time ago, we wrote an article for The Bottom Line on accountants and client privilege (see the mid-September, 2003 issue). In the article, we noted that, in light of Tower v. M.N.R. and BDO Dunwoody LLP, [2002] D.T.C. 7315 (F.C.T.D.), rev’d 2003 FCA 307 on other grounds, most communications between an accountant and her client are not privileged. A recent case—M.N.R. v. Reddy, 2006 FC 277—shows that neither is some of the confidential information held by a lawyer about her client.
I am regularly asked whether it is possible to “multiply” the small business deduction (the SBD), and just as regularly I find it difficult to provide easy-to-understand advice and guidance. The association rules are complex, and even if their technical requirements are met the CRA can still reassess to require corporations to share the SBD on the grounds that they are controlled de facto by the same person. Two recent cases show that the courts are willing to uphold such reassessments.