Valley Equipment Limited v. The Queen, 2006 TCC 510, is interesting reading in light of Bourgault Industries Ltd. v. The Queen, 2006 TCC 449. In Valley Equipment, the Tax Court judge stated that there was no need to resort to…
Salary and shareholder loan accounts
In Irmen v. The Queen, 2006 TCC 475, the taxpayer, a shareholder and key employee of a corporation, received amounts from the corporation throughout the taxation year. During the year, the corporation accounted for the amounts as salary, and CPP and tax was deducted and remitted. At the end of the year, however, the taxpayer and his accountant decided that he should really have taken amounts from the corporation as a draw on his shareholder loan. Adjusting entries were made accordingly, and the taxpayer reported only a small amount as employment income in the taxation year. The CRA, however, reassessed the taxpayer as if he had received salary and not a draw on his shareholder loan.
Redeemer Foundation
Some time ago, I wrote a post about M.N.R. v. Redeemer Foundation, 2006 FCA 325. At the time, an online version of the judgement had not yet been published. You can now find the judgement here.
Fraud, again
It appears that even the Department of Finance is having to wage war on phishing: see E-mail Fraud Alert.
Eliminating tax packages
I wonder how much confusion this will create: Elimination of Tax Packages for Individuals Using the Services of a Tax Professional.
Eligible dividends
The new eligible dividend rules require corporations “to designate each eligible dividend that they pay and notify shareholders in writing that the dividend is eligible.” The CRA issued a release just before Christmas that provides guidelines on how the designation…
Information for individuals leaving Canada
From time to time my clients contemplate leaving Canada for warmer weather or more friendly tax collectors. Over the years, I have collected a set of CRA publications and forms that provide useful guidance on the tax consequences of becoming…
Public relations and battling fraud
Judging by a recent press release, the CRA has hired a new public relations officer.
Surrogatum
How to treat payments received as damages in a lawsuit—whether as a result of a judgment or pursuant to a settlement—can be a vexing question. The Supreme Court of Canada provided some guidance in Tsiaprailis v. Canada, [2005] 1 S.C.R. 113, 2005 SCC 8. The Tax Court applied Tsiaprailis recently in Bourgault Industries Ltd. v. The Queen, 2006 TCC 449. Justice Woods, in the latter case, characterized the analysis as follows:
Draft legislation for Christmas
The Department of Finance generally gives tax practitioners a little something—obscure draft legislation usually—to chew on between Christmas and New Year’s. I was beginning to worry that the Department had forgotten about us this year, but I should have known…