Two recent cases address unsuccessful attempts to avoid tax by dubious means.
Pendulum swing
Redeemer Foundation v Canada (National Revenue), 2008 SCC 46, makes it clear that the CRA has broad powers to demand information relating to unnamed third parties, sometimes even without the need for prior judicial authorization (as per subsection 231.2(2)). Two…
Rectification denied
From the “There But for the Grace of God Go I” file, see Kanji v AG Canada, 2013 ONSC 781. It’s striking that the trial judge was so troubled by the lack of supporting evidence from Mr Kanji’s professional advisers…
Meaning of “active business”
David Bazar was good enough to forward to me an interesting case on the meaning of “active business” in the Income Tax Act. In Ollenberger v R, 2013 FCA 74, the Court was called on to consider whether the use of the word “active” in the phrase required something more than just any business that is not a “specified investment business” or a “personal services business”. The Court held that “active” did no such thing.
Tax in the news
Tax is really in the news this week. The Current was asking whether Canada needs to get tough on tax evasion. The CBC says that the CRA is getting tough on home offices (when did they ever go easy on…
A case for checklists
Paragraph 248(7)(a) of the Income Tax Act (Canada) deems a return or other document mailed by first class mail to be received by the addressee on the date it is mailed. What happens if you send a document to the CRA by mail and it says it didn’t get it? The answer seems to be that you or your accountant had better have a standard procedure for mailing documents about which you can give evidence to convince the CRA or a court on a balance of probabilities that the document was mailed even if the CRA did not get it.
Point in time due diligence
A director of a corporation that fails to remit source deductions might be duly diligent to a point in time, and therefore not liable for the failure to that time, but not diligent after that time, and therefore liable for…
Donation tax shelter case
Hamilton’s own Mr Justice Randall Bocock goes head-to-head with Maréchaux in Berg v R, 2012 TCC 406.
Subsection 83(2.1) applied
In Groupe Honco inc. c R, 2012 CCI 305, the Tax Court applied the anti-avoidance rule in subsection 83(2.1) to a dividend purported to be paid from the capital dividend account of a corporation taken over by another so that…
No rectification necessary
In Twomey v R, 2012 TCC 310, the taxpayer thought he had been issued 100 Common Shares in the capital of a corporation, but the minute book indicated he had received only one. The difference mattered: whether the taxpayer could…