I posted previously on the decision of the Federal Court of Appeal in Canada (Minister of National Revenue) v. Ellingson, 2006 FCA 202, which was decided in light of the Supreme Court of Canada’s decision in R v. Jarvis, [2002] 3 S.C.R. 757, 2002 SCC 73. The Ontario Court of Appeal has now weighed in on the subject in R. v. Tiffin, 2008 ONCA 306. In this case, the Court of Appeal considered a trial court finding that the CRA had abused its audit power in pursuit of a criminal investigation. The Court considered whether the evidence gathered using the audit power should be excluded. Ultimately, in a split decision, the Court decided that a significant portion of the evidence should not be excluded even though the trial judge concluded that the CRA personnel involved had acted in bad faith and dishonestly. The decision is also interesting for the insight it gives into the methods used by the CRA’s “Special Enforcement Program” and the distinction between an investigation and an audit.
Paying dividends
Richard Weber at Taylor Leibow was kind enough to forward to me a CRA technical interpretation (2007-0229311I7) dated June 14, 2007, concerning the payment of dividends. A corporation purported to pay a capital dividend. The necessary election was filed, but the corporation forgot to reflect the dividend in its financial statements, and apparently the dividend was not otherwise paid. The CRA discovered these facts when conducting an audit.
Leaving a Sinking Ship
The following article on resignation as a director of a corporation and directors’ liability under the Income Tax Act (Canada) appeared in the latest edition of the Hamilton Law Association Law Journal.
2.0
Over the last few years, lawyers’ magazines and newspapers have been full of talk about “Web 2.0” and its significance for the legal profession. To some degree, I remain a skeptic, despite that I have been blogging (a quintessential 2.0 activity) since 2005.
Donald Bowman Joins FMC
Donald Bowman, the former Chief Justice of the Tax Court of Canada, has joined Fraser Milner Casgrain LLP as Counsel.
New Associate Chief Justice
Most tax practitioners will have heard that a 25-year veteran of the Tax Court was appointed as its new Chief Justice earlier this month. Gerald Rip takes over from Donald Bowman, who turned 75 this month. The Prime Minister also appointed Eugene Rossiter as the new Associate Chief Justice. Justice Rossiter is a relative newcomer to the Court: he was only appointed in 2006. Perhaps he is being groomed for the Chief’s chair.
C-50
Bill C-50—”An Act to implement certain provisions of the budget tabled in Parliament on February 26, 2008 and to enact provisions to preserve the fiscal plan set out in that budget”—received third reading in the House of Commons yesterday.
Recent cases
Joe Monaco will be giving a presentation at the CRA practitioner’s roundtable on June 5 at the Royal Botanical Gardens.
Refund Interest
Subsection 164(3) of the Income Tax Act (Canada) requires the Minister to pay interest on an amount that is refunded, repaid or applied to another liability.
Charities newsletter
Registered Charities Newsletter No. 29 is now available from the CRA website.