Perhaps reports of the GAAR’s death—by Brian Arnold among others—have been greatly exaggerated. See Ceco Operations Ltd. v. The Queen, 2006 TCC 256. Apparently, the taxpayer has filed an appeal from Justice Bonner’s decision in favour of the Minister in…
Two cases
The latest CCH Tax Topics contain summaries of two interesting recent cases, one (Truckbase Corporation v. The Queen, 2006 TCC 215) dealing with the deduction of fees paid to amend a shareholder agreement and the other (Canada (Minister of National Revenue) v. Ellingson, 2006 FCA 202) with the powers of the Minister to demand information “where a suspicion exists as to unreported income and illegal activity”.
GAAR and surplus stripping
Not long after the Tax Court released Evans v. The Queen, 2005 TCC 684, it released Archambault, J.’s decision in Desmarais v. The Queen, 2006 TCC 44, which came to a different conclusion about whether GAAR could apply to surplus strips.
Rectification again
The Ontario Reports just published another rectification case. See Di Battista v. 874687 Ontario Inc., 80 O.R. (3d) 136, 2005 CanLII 51220 (ON S.C.). The report is sketchy on the details, but it contains a useful list of the relevant…
Intention and dance
Sometimes my clients like to tell me that “in tax, intention is everything”. In fact, the courts have always been quite careful to limit the role that mere subjective intention plays in determining the tax consequences of a transaction. For a recent example, see my article on Makuz v. The Queen, 2006 TCC 263. Royal Winnipeg Ballet v. M.N.R., 2006 FCA 87, rev’g 2004 TCC 390, however, seems to mark something of a new direction in this regard.
Tax shelters
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.
Control and groups
Crystal Beach Park Limited v. The Queen, 2006 TCC 183 is an interesting case with some local roots
More on Fraud
In September last year, I wrote a short article about fraud and income tax. The Federal Court of Appeal reiterated the law on this subject in Vankerk v. The Queen, 2006 FCA 96. The ratio of Madame Justice Sharlow is…
Limits on Solicitor and Client Privilege
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.
De Facto Control
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.