Recent Posts

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  Friedman v. R. – FCA: Court declines to set aside compliance order – subsection 231.7(1)

  Jun 01, 2021 By Bill Innes

  Categories:

  • Bill Innes on Current Tax Cases
  • Federal Income Tax
  • Personal Tax, Estate & Wealth Planning

  Précis: Mr. and Mrs. Friedman received requests for information which they did not provide to CRA. CRA then moved in the Federal Court for a compliance order under subsection 231.7(1) which was granted. The Friedmans argued in the Federal Court that the compliance order should not be granted on two bases: [11] The Friedmans initially challenged the request for information on the basis that the procedure under subsection 231.1(1) infringed their right to liberty, and their protection against self-incrimination pursuant to sections 7, 11(c), and 13 of the Canadian Charter of Rights and Freedoms (the Charter). Subsequently, they applied for and were granted leave to plead that the Federal Court should follow another Federal Court decision on the same issue, Canada (National Revenue) v. Lin, 2019 FC 646 [Lin], in which the Federal Court dismissed an application for a compliance order pursuant to subsection 232.7(1). In that case, the Court found that “the Letters are addressed to both the individuals and their connected entities. The entities are not specified, and it is not clear who is being audited - the individual Respondents or unnamed entities”: Lin at para. 31. Their arguments were unsuccessful in the Federal Court and they appealed to the Federal Court of Appeal. Pelletier J.A. writing for the Court rejected the argument based on a failure to follow the Lin decision because the Judge had correctly distinguished the Lin case. He also rejected the self-incrimination arguments at this stage of proceedings based in part on the Jarvis decision and in part on the absence of a sufficient factual record. Thus the appeal was dismissed with costs. While the Minister asked for additional costs based on the Friedmans having abandoned some of their constitutional arguments at the last minute Pelletier J.A. found that the mischief involved was not such as to merit an increased costs award.
  Friedman v. R. – FCA: Court declines to set aside compliance order – subsection 231.7(1)READ MORE »
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  Escape Trailer Industries Inc. v. R. – FCA: Court of Appeal dismisses appeal from Federal Court – taxpayer not entitled to remission order on HST and interest

  Apr 03, 2020 By Bill Innes

  Categories:

  • Bill Innes on Current Tax Cases
  • Commodity Tax
  • Corporate Tax
  • Federal Income Tax

  Précis: The taxpayer sought a remission order in respect of harmonized sales tax (HST) plus interest totaling $273,183.39. When the Minister denied the request the taxpayer appealed to the Federal Court which refused to recommend a remission order. The taxpayer appealed to the Federal Court of Appeal which dismissed the appeal holding that the Assistant Commissioner’s determination that there were no extenuating factors justifying a remission order was not unreasonable under the circumstances. Thus the appeal was dismissed with costs.
  Escape Trailer Industries Inc. v. R. – FCA: Court of Appeal dismisses appeal from Federal Court – taxpayer not entitled to remission order on HST and interestREAD MORE »
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  Sharp v. R. - FC: “Fabricated” evidence allowed to remain on record with appropriate notation

  Aug 04, 2017 By Bill Innes

  Categories:

  • Bill Innes on Current Tax Cases
  • Federal Income Tax
  • Other

  Précis: The applicants moved to set aside a ministerial requirement for information under subsection 231.1(2) of the Income Tax Act on the basis that it was being used to further a criminal investigation of their affairs. In support of the application the applicants tendered an affidavit of a Ms. Kaiser which purported to attach correspondence involving an employee of CRA. That correspondence was found to have been fabricated. The sole question before the Court not already agreed upon by the parties was whether the fabricated correspondence should continue to form part of the record with an appropriate notation that it was fabricated (the position of the Crown) or whether it should be removed and replaced by a fresh affidavit provided by the applicants (the position of the applicants).
  Sharp v. R. - FC: “Fabricated” evidence allowed to remain on record with appropriate notationREAD MORE »
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  Binder Capital v. R. - FC: Federal Court rules it has no jurisdiction over application of section 129 of Income Tax Act

  Jul 13, 2017 By Bill Innes

  Categories:

  • Bill Innes on Current Tax Cases
  • Federal Income Tax
  • Other

  Précis: The two applicant corporations had each applied for a dividend refund pursuant to section 129 of the Income Tax Act (the “Act”). In each case CRA denied the refund on the basis that the necessary returns had not been filed within the period of three years from the end of the taxation year in question. The applicants argued that CRA’s failure to grant relief from the three year limitation period in section 129 of the Act was unreasonable and sought judicial review of that decision. The Crown argued that the Federal Court did not have jurisdiction to interpret the operation of section 129. The Crown argued that the Tax Court had exclusive jurisdiction of such questions. The Federal Court accepted the Crown’s argument on the dividend refunds. The Court however allowed, on consent, the applicants’ applications on the question of interest and penalties arising from the late filing of returns and referred the matters back to the Minister for fresh consideration by another delegate.
  Binder Capital v. R. - FC: Federal Court rules it has no jurisdiction over application of section 129 of Income Tax ActREAD MORE »
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  CRA Announces it will not seek leave to appeal the FCA’s BP Canada Energy decision

  Jun 08, 2017 By Bill Innes

  Categories:

  • Bill Innes on Current Tax Cases
  • Corporate Tax
  • Federal Income Tax

  Précis: The decision of the Federal Court of Appeal in BP Canada Energy v. Canada (National Revenue) (March 30, 2017 – 2017 FCA 61, Nöel C.J. (author), Stratas, Boivin JJ.A.) was blogged earlier on this site. The précis read: The Federal Court of Appeal has reversed the Federal Court’s decision that held that corporate taxpayers can be required to produce their internal tax accrual working papers (“TAMPs”). This may be one of the most important cases in several years on the extent of the power CRA has in gathering private tax information compiled by Canadian businesses. The Chief Justice of the Federal Court of Appeal, who is a noted tax expert, has written an intellectually compelling decision. If the Supreme Court grants leave to appeal, which I think highly likely, it is difficult to predict what the Court will do. If I were a betting person, I would be inclined to think that the McLachlin Court, which has always exhibited a balanced, pragmatic approach in tax cases, will accept the analysis of Chief Justice Nöel.
  CRA Announces it will not seek leave to appeal the FCA’s BP Canada Energy decisionREAD MORE »
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  Fink v. R. - FCA: Applicant entitled to ask questions about other remission order applicants in stock option plan

  May 10, 2017 By Bill Innes

  Categories:

  • Bill Innes on Current Tax Cases
  • Other

  Précis: Mr. Fink applied for a remission order in connection with the taxation of stock option benefits. He applied for judicial review of a decision of the Assistant Commissioner of the CRA refusing to recommend that the Governor in Council issue a remission order. During the course of that application Mr. Fink’s counsel sought to cross-examine on affidavits filed on behalf of CRA. The issue before the Court of Appeal was whether Mr. Fink’s counsel could put 5 questions related to remission applications filed by other taxpayers. The Federal Court Judge directed CRA to answer the questions and CRA appealed to the Federal Court of Appeal. On appeal the Federal Court of Appeal dismissed the appeal, with costs, holding that the questions were proper.
  Fink v. R. - FCA: Applicant entitled to ask questions about other remission order applicants in stock option planREAD MORE »
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  Biles Estate v. R. - FC: Court refuses order of mandamus to compel CRA to comply with alleged agreement

  Apr 20, 2017 By Bill Innes

  Categories:

  • Bill Innes on Current Tax Cases
  • Federal Income Tax
  • Personal Tax, Estate & Wealth Planning

  Précis: This decision involved two applications for judicial review by the same taxpayer. They were heard together. The taxpayer sought an order of mandamus to compel CRA to comply with the terms of an alleged agreement (the “Proposal”) to settle a tax dispute. The Federal Court found that the taxpayer had failed to demonstrate that there in fact was any enforceable agreement with respect to the Proposal. In any event CRA’s conduct was not unreasonable under the circumstances. Both applications were dismissed with costs.
  Biles Estate v. R. - FC: Court refuses order of mandamus to compel CRA to comply with alleged agreementREAD MORE »
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  BP Canada Energy v. R - FCC: CRA not entitled to internal tax accrual working papers (TAWPs)

  Apr 03, 2017 By Bill Innes

  Categories:

  • Bill Innes on Current Tax Cases
  • Corporate Tax
  • Federal Income Tax

  Précis: The Federal Court of Appeal has reversed the Federal Court’s decision that held that corporate taxpayers can be required to produce their internal tax accrual working papers (“TAMPs”). This may be one of the most important cases in several years on the extent of the power CRA has in gathering private tax information compiled by Canadian businesses. The Chief Justice of the Federal Court of Appeal, who is a noted tax expert, has written an intellectually compelling decision. If the Supreme Court grants leave to appeal, which I think highly likely, it is difficult to predict what the Court will do.
  BP Canada Energy v. R - FCC: CRA not entitled to internal tax accrual working papers (TAWPs)READ MORE »
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  Coley v. R. - FC: Judicial review application for taxpayer relief dismissed - CRA decision not unreasonable

  Mar 06, 2017 By Bill Innes

  Categories:

  • Bill Innes on Current Tax Cases
  • Federal Income Tax
  • Personal Tax, Estate & Wealth Planning

  Précis: The Applicant, Donald Cooley and Tradelink Stucco & Construction Inc., applied for both income tax relief (penalties and interest) in connection with its 2004 and 2005 taxation years as well as payroll and GST/HST relief (penalties and interest) for the 2009-2014 tax years. Both applications were denied in two letters and the Applicant moved for judicial review. The Court treated the two letters as one decision. The requests for relief were premised on financial distress. In denying the relief sought CRA concluded that there was not sufficient evidence of distress and that the Applicant’s directors did not exercise the reasonable care expected to ensure proper filing and remittances.
  Coley v. R. - FC: Judicial review application for taxpayer relief dismissed - CRA decision not unreasonableREAD MORE »
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  Canada (National Revenue) v. KPMG LLP - FCt: Court refuses to set aside an ex parte requirement Order

  Feb 08, 2017 By Bill Innes

  Categories:

  • Bill Innes on Current Tax Cases
  • Other

  Précis: In 2013 Justice Nöel granted an ex parte application ordering KPMG LLP to produce documentation about certain unnamed persons involved in a tax structure known as the Offshore Company Structure [the “Unnamed Persons Requirement”]. KPMG LLP moved in 2016 before Chief Justice Crampton to cancel or quash that order on the basis of the confidentiality requirement contained in Rule 208 of the Chartered Professional Accountants of Ontario’s Code of Professional Conduct [the “Code”] as well as the fact that the provision of the Income Tax Act in question, subsection 231.2(3),was amended effective June 26, 2013, to eliminate the Court’s ability to issue orders under that provision on an ex-parte basis.
  Canada (National Revenue) v. KPMG LLP - FCt: Court refuses to set aside an ex parte requirement OrderREAD MORE »