In a post I wrote some time ago, I argued that the 10-year limitation rule for fairness (taxpayer relief) applications is ambiguous. I also noted that the CRA believes the rule is clear, and apparently it maintains that position still,…
Income-splitting gone wrong
In Demers c. La Reine, 2006 CCI 504, the taxpayer tried to split income with his minor daughters. The Court ruled against the taxpayer, in part because it considered artificial the payment of thousands of dollars of dividends on shares that were issued for only $1.
The Long Arm of Section 160
The following article on section 160 of the Income Tax Act (Canada) appeared in the latest edition of the Hamilton Law Association Law Journal. It is an expanded version of one of my posts from August.
Section 160 of the Income Tax Act (the “Act”) permits the CRA to assess “at any time” a taxpayer who receives property for inadequate consideration from a non-arm’s length tax debtor.
Requirements
At some point, I will write a longer piece on requirements to pay, but for now I will rest content with pointing to Encan Construction Ltd v. The Queen, 2007 TCC 579, as an example of the heavy burden they can impose on a taxpayer.
Soccer appeal denied
In its latest decision on the subject of registered charities, the Supreme Court has denied the appeal of the charity in A.Y.S.A. Amateur Youth Soccer Association v. Canada (Revenue Agency), 2007 SCC 42.
Price adjustments
In a post I wrote in the spring, I summarized briefly Desormiers c. Lalumière, 2006 QCCS 2357, a decision of the Quebec Superior Court, which seemed to call into question the effectiveness of price adjustment clauses.
Garnishments
A garnishment (or “requirement to pay”) under section 224 of the Income Tax Act can be a real headache for the garnishee. The garnishee is put in the middle of another taxpayer’s troubles with the CRA, and the scope of the requirement is sometimes unclear.
Fairness
Making an application for fairness—or “taxpayer relief” as it is now called—is often a frustrating process for a tax professional. One wonders, sometimes, whether the CRA agent responsible even reads the application. The CRA has issued Information Circular IC07-1 about…
Revival
Subsection 227.1(1) of the Income Tax Act (Canada) (the “Act”) permits the CRA to assess a director of a corporation for the corporation’s failure to remit source deductions. Subsection 227.1(4) of the Act, however, provides that
no action … to recover any amount payable by a director of a corporation under subsection [227.1(1)] shall be commenced more than two years after the director last ceased to be a director of that corporation.
What happens if a director, who is otherwise potentially liable under section 227.1, fails to resign, but the corporation of which he is a director dissolves involuntarily and more than two years passes before the CRA issues an assessment under section 227.1?
Baxter, 2007 FCA 172
In Baxter v. The Queen, 2006 TCC 230, Mr. Justice Bell examined the definition of “tax shelter” in the Income Tax Act and concluded that the appellant taxpayer, a Mr. Baxter, did not buy a shelter when he purchased trading software. The Federal Court of Appeal disagreed and allowed the Crown’s appeal.