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Posts tagged "Penalties"

Lauzon v. R. - FCA: Fiscal Arbitrators appeal rejected by Federal Court of Appeal
30 novembre 2016 By Bill Innes
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Précis: This is an appeal from a Tax Court decision upholding a gross negligence penalty where the taxpayer had claimed $308,073 in false business losses in a Fiscal Arbitrators scheme. It is perhaps surprising that the Federal Court of Appeal reserved for 1 day and took a full 16 paragraphs to dismiss the appeal. Nevertheless Justice Woods is a very careful jurist.
Lauzon v. R. - FCA: Fiscal Arbitrators appeal rejected by Federal Court of AppealPlus >
Whissell v. R. - FCA: Taxpayer fails in appeal of non-filing penalties
26 octobre 2016 By Bill Innes
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Précis: This was an appeal from decisions of the Tax Court blogged earlier on this site. Mr. Whissell was assessed for 2006, 2007, 2008, 2009 and 2010 in respect of unreported income. He was assessed non-filing penalties under subsection 163(1) for each of 2007, 2008, 2009 and 2010. The sole issue before the Tax Court was the imposition of these penalties. The Court held that he had not made out a due diligence defence.
Whissell v. R. - FCA: Taxpayer fails in appeal of non-filing penaltiesPlus >
Mazo v. R. - TCC: Taxpayer taxed on income from pyramid scheme, entitled to deduct costs
26 octobre 2016 By Bill Innes
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Précis: The Taxpayer participated in a pyramid scheme known as Business In Motion International Corporation (“BIMIC”) in 2007, 2008 and 2009. She received proceeds of roughly $90,000 in those years which CRA added to her income and imposed gross negligence penalties. The taxpayer appealed to the Tax Court. The Tax Court concluded that the proceeds were in fact taxable but concluded that the taxpayer should be allowed a deduction for her costs of buying into the scheme. The gross negligence penalties were sustained.
Mazo v. R. - TCC: Taxpayer taxed on income from pyramid scheme, entitled to deduct costsPlus >
Osaduke v. R. - TCC: Unreported income adjusted but penalties sustained on lower amount
4 octobre 2016 By Bill Innes
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Précis: The taxpayer was audited and the auditor by means of examining bank deposits concluded that he had unreported income in both 2008 and 2009 from the sale of metal and coins and from eBay sales. The Tax Court reduced the unreported income from $62,111 and $46,008 in 2008 and 2009 respectively to $39,488 and $44,425 respectively however it sustained gross negligence penalties on the reduced amounts. There was no award of costs since this was an informal procedure appeal.
Osaduke v. R. - TCC: Unreported income adjusted but penalties sustained on lower amountPlus >
Kim v. R. - TCC: Net worth assessments and gross negligence penalties sustained in large part
11 août 2016 By Bill Innes
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Précis: Mr. and Mrs. Kim operated a laundry and dry-cleaning business as equal partners. They were reassessed for unreported business income in the 2010 and 2011 taxation years on a net worth basis. Gross negligence penalties were sustained. There was no order as to costs since these were informal procedure appeals.
Kim v. R. - TCC: Net worth assessments and gross negligence penalties sustained in large partPlus >
Pirart v. R. - TCC: Assessment based on income from drug sales sustained in part
10 août 2016 By Bill Innes
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Précis: Mr. Pirart was assessed unreported income in the amounts of $1,050,000 for 2005, $1,200,000 for 2006, $1,350,000 for 2007, and $1,500,000 for 2008, mostly from an alleged cocaine business; in addition he was assessed for gross negligence penalties on the unreported income. The Tax Court accepted his evidence that the cocaine was the property of his former partner, Wendy Anderson (since deceased), and allowed the appeal with respect to that income. It dismissed the appeal with respect to his income in the amount of $32,400 from a marihuana business in 2007 and 2008 and sustained the penalties on that unreported income. There was no order as to costs since success was mixed.
Pirart v. R. - TCC: Assessment based on income from drug sales sustained in partPlus >
Gorman v. R. - TCC: Shares acquired by RRSP not qualified investments, penalties sustained
9 août 2016 By Bill Innes
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Précis: The taxpayer was persuaded by a promoter to acquire shares of 629900 Saskatchewan Ltd. (“629900”) in her RRSP. She relied upon the promoter’s promises of a 50% to 100% return on her investment within one to two years. CRA assessed her on the basis that the shares were not qualified investments for an RRSP and imposed gross negligence penalties. The Tax Court upheld both the assessment and the penalties. Costs were awarded to the Crown.
Gorman v. R. - TCC: Shares acquired by RRSP not qualified investments, penalties sustainedPlus >
Melman v. R. - TCC: $18.85 million in dividend income unreported, gross negligence penalties sustained
5 août 2016 By Bill Innes
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Précis: Mr. Melman omitted to include $15,080,000.00 in dividends (yielding $18,850,000.00 in taxable dividends) in his 2007 tax return filed in April of 2008. This resulted in an understatement of his tax payable by a factor of 12.5. The Court found that Mr. Melman was a highly educated, meticulous person who planned his tax affairs in consultation with his accountants and had set aside a reserve fund for his 2007 taxes in the amount of $4,725,000.00. However he claimed not to have reviewed his 2007 return before signing it and only paid $359,604.43 based on the return filed.
Melman v. R. - TCC: $18.85 million in dividend income unreported, gross negligence penalties sustainedPlus >
Whissell v. R. - TCC: Taxpayer failed to make out due diligence defence for non-filing penalties
27 juillet 2016 By Bill Innes
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Précis: Mr. Whissell was assessed for 2006, 2007, 2008, 2009 and 2010 in respect of unreported income. He was assessed penalties under subsection 163(1) for each of 2007, 2008, 2009 and 2010. The sole issue before the Tax Court was the imposition of these penalties. The Court held that he had not made out a due diligence defence. All of the appeals with the exception of 2006 were dismissed with costs. The 2006 appeal was allowed, without costs, only to the extent of recognizing a charitable donation of $150 which was conceded by the Crown.
Whissell v. R. - TCC: Taxpayer failed to make out due diligence defence for non-filing penaltiesPlus >
Samson v. R. - TCC: Penalties for failure to disclose foreign property sustained
26 mai 2016 By Bill Innes
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Précis: Mr. Samson and his wife, Ms. Hilliard, owned property in the United States worth more than $100,000 which they did not report in their 2008 to 2011 income tax returns. They were each assessed $2,500 penalties under subsection 162(7) for each of the years 2008 through 2011 for failing to file forms T1135 in respect of their foreign property by the end of April of the following year as required by section 233.3 of the Income Tax Act (Canada) (the “Act”). [para. [1]]
Samson v. R. - TCC: Penalties for failure to disclose foreign property sustainedPlus >

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