Apparently, the Ontario Medical Association has opened a law firm. It is offering to incorporate professional corporations for doctors for a “nominal” fee ($100 plus disbursements plus GST for a total of $523.90). It is unclear how long this sale will last, so doctors should hurry to take advantage of it before it is too late.
Section 84.1
What tax practitioner hasn’t woken up in the middle of the night, sweating, because of dreams haunted by section 84.1 file demons? I will try to banish the demons — or propitiate them anyway — in a short presentation on February 2, 2006 at the CRA’s Hamilton & District Tax Consultation Group.
Fairness: First and Second Reviews
A taxpayer submits a fairness request to the CRA, and the request is rejected by the first officer to review it on the ground that it did not show inability to pay. The taxpayer agrees with the officer: the taxpayer did fail to show inability to pay because the taxpayer never raised the issue! The taxpayer, however, did mention CRA delay as a ground for relief, but that point is not addressed by the officer. The taxpayer sends the request back to the CRA for another review. A recent case — Dort (Estate) v. Canada (Minister of National Revenue), 2005 FC 1201 —- suggests that this other review should be regarded as a “first look” by the CRA and that, if the CRA rejects the request, the taxpayer is entitled to a second review.
RRSP Mischief
Here’s a depressing case to start off the New Year and take us into the “RRSP season”: Nunn v. The Queen, 2005 TCC 806. The CRA warning about similar schemes, discussed here and here, was apt but too late for…
Medical/Dental PC Regulation Released
Yesterday, Ontario published the regulation that prescribes who can own shares of professional corporations (PCs) controlled by doctors and dentists — see Ontario Regulation 665/05 under the Business Corporations Act (Ontario).
Cautionary Tale
Rajah v. The Queen, 2005 TCC 637 is not a case that breaks new ground, legally, but it serves as a useful reminder — expressed with the usual clarity and concision that one finds in Mr Justice Bonner’s decisions — that (1) the key question in any dispute about an assessment of tax is whether it is too high; (2) the taxpayer bears the onus of proving that the assessment is too high; and (3) the taxpayer cannot rely on information (supposedly) obtained from the CRA, especially if it is obtained from a nameless agent contacted through the CRA’s 800 number.
Update on Medical/Dental PCs
Bill 197, “An Act to Implement Budget Measures”, received Royal Assent last Monday. As a result, after 2005 the Lieutenant Governor in Council can make regulations that will permit the family members of doctors and dentists to hold shares of…
Set-back for Donation Tax Shelters
Over the last decade or so, thousands have reduced their tax bills by millions of dollars by purchasing prints, paintings, comic books, medical supplies and other items at one price and then donating the items to a charity at another, higher price. The CRA has aggressively attacked these donation arrangements to try to claw back the tax. Will it succeed? It might, if Canada (Attorney General) v. Nash, 2005 FCA 386, is any indication.
Relief for Charities?
Some time ago, I wrote about proposed subsection 248(40), which would have required charities to make inquiries about the circumstances surrounding a gift where the eligible amount of the gift exceeded $5,000. It appears that Finance might withdraw the proposed subsection.
Finance on Income Trusts
In a press release that appeared on the Department of Finance website today, Finance Minister Ralph Goodale announced that Finance consultations on income trusts had ended and that it would attempt to solve the problem posed by the vehicles by reducing “personal income taxes on dividends, which will help level the playing field between corporations and income trusts.”