Max Reed, "TFSA: US Tax Classification," Canadian Tax Highlights, Vol. 22, No. 7, July 214, p. 5
TFSA not a trust for Code purposes (p.6)
[I]f an entity is separate from its owner, it is subject to the entity classification regime unless it is specifically classified in the Code or regulations; the TFSA is not. A TFSA also does not meet the definition of a trust for US tax purposes. A foreign trust is defined in Code section 7701(a)(31)(B) as any trust that is not domestic. A trust is defined in regulation 301.7701-4(a) as an arrangement in which the trustee "take[s] title to property for the purpose of protecting or conserving it for the beneficiaries under the ordinary rules applied in chancery or probate courts." A bank does not take title to property deposited into a TFSA. A statutory precondition to the establishment of a TFSA (ITA paragraph l46.2(2)(e)) is that at the customer's direction the financial institution "shall transfer all or any part of the property held in connection with the arrangement (or an amount equal to its value) to another TFSA of the holder," a right that assumes that the customer retains title to the property. ...
Default classification as disregarded entity (p. 6)
In summary, the precise classification of a TFSA is not certain, but a TFSA is not a foreign trust because it is not an entity separate from its owner; thus, the entity classification rules do not apply and no special reporting of the TFSA is required. Even if the entity classification rules apply, the default classification of a TFSA is that of a disregarded entity for US tax purposes, and a form 8858 must be filed annually.
Dep. MNR v. Bonair Leisure Industries Ltd., 82 DTC 6217,  CTC 188 (FCA)
It was stated respecting the use of the word "homes" in the Excise Tax Act: "The word is not qualified by any adjective. There is thus no reason for not according it the fullest or broadest meaning it may bear that is consistent with the context in which it is found".
TFSA audit project (p.5)
Sources from the tax and legal sectors of the CRA have apparently confirmed to the Financial Post that the CRA has rolled out a TFSA audit project that has become increasingly active in the past couple of years….
Impending litigation re TFSA day trading (p.5)
Now a Calgary law firm says it is readying for a legal fight with Ottawa. As quoted in the Financial Post:
"There are a lot of people, day traders, with online brokerage accounts and they sit and buy and sell securities. Maybe 10 to 15 trades a day," says Tim Clarke, a lawyer with Calgary's Moodys Gartner Tax Law LLP, which is preparing to challenge the tax agency's interpretation. "The CRA says that means you are trader in securities and you are carrying on a business."
…"There is no case law on this business of carrying on a business in a TFSA," said Lauchlin MacEachern, another lawyer with Moodys Gartner, who says he can't comment on specific cases. "In the next year or two we expect there to be a case that goes to court and we'll know whether carrying on a business in your TFSA means trading securities actively. We say that's a question of fact and we also disagree with their legal interpretation."