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.”
OBA Presentation on Professional Corporations
This morning, I spoke at an Ontario Bar Association seminar entitled “More Tax Issues You Cannot Afford to Miss”. My subject was professional corporations. You can download a copy of the paper that I co-authored on the subject here.
CRA Obligations to Disclose Audit Files
In Scott Slipp Nissan Ltd. v. Canada (Attorney General), 2005 FC 1477, the Federal Court held that section 295 of the Excise Tax Act did not authorize the Minister to refuse to disclose portions of an audit report merely because…
“Grumbling”?
I sit on the executive of the Ontario Bar Association’s tax section. In that capacity, I gave an interview to the London Free Press yesterday about proposed amendments to the Ontario Business Corporations Act. The amendments will allow professional corporations…
Limits on Fairness
Apparently, the Department of Finance and the CRA believe that you can have too much fairness in the tax system. In the 2004 budget, Finance introduced a ten-year limitation period for fairness applications. It appears that the CRA is now adopting a particularly strict interpretation of the rule to deny relief to taxpayers even where the events that form the basis for the fairness request occurred within the limitation period.