A secondary assessing position of a TSO was that a Delaware LLLP, which had been wound-up, had been a corporation for ITA purposes. In the course of confirming this characterization, the Directorate provided a detailed listing of the relevant provisions of the Delaware legislation (the DRULPA), as well as summarizing the (unexceptional) features of the partnership agreement. This listing might be a useful checklist when confirming the portability of the CRA position respecting Delaware and Florida LLPs and LLLPs to other jurisdictions.

The Directorate went on to note that since it had recently determined to provide grandfathering relief re the application of its position to existing LLPs and LLLPs (see 2017 IFA Roundtable, Q.3), it recommended against treating this LLLP as having been a corporation.

Neal Armstrong. Summary of 13 February 2017 Internal T.I. 2015-0587691I7 under s. 96.

Robinson found that damages received by an employee, following the amalgamation of the City of Gatineau for whom he worked and the failure of the new City to hire him, were a non-taxable receipt. The same result did not obtain where a taxpayer who had been appointed by a transitional committee to be the chief executive of the new amalgamated city (in this case Saguenay) was fired by the mayor on the second day of existence of the new City (with that decision ratified a week later) – so that his subsequent award of damages was a retiring allowance. Lavoie JCQ stated:

The very short duration of this employment from the beginning of the existence of the new city to his dismissal…does not allow us to discard the notion that he was compensated for losing employment that had been acquired by him.

Neal Armstrong. Summary of Girard v. Agence du revenu du Québec, 2017 QCCQ 3245 under s. 248(1) - retiring allowance.

An individual, who was the sole limited partner of a Quebec limited partnership (“SEC”) that owned and operated multiple farms, and the president of its general partner, argued that he was not a limited partner under the Quebec equivalent of ITA s. 96(2.4)(a), so that he could deduct his share of a substantial loss of the LP. He relied in this regard on s. 2244 of the Civil Code, which provided that a limited partner “may not negotiate any business on behalf of the partnership or act as mandatary or agent for the partnership,” and pointed to his involvement in the business of the LP including negotiating with suppliers and making various purchases.

Breault JCQ found that the individual had failed to establish that such activities were not effected as agent or manager for the general partner. He also quoted with approval an author who opined that “it is only in the common law provinces that the control of the internal management of a limited partnership gives rise to liability of the limited partners.”

Neal Armstrong Summary of Vinet v. Sous-ministre du Revenu du Québec, 2017 QCCQ 3957 under s. 96(2.4)(a).

The taxpayer promoted a scheme, that purportedly permitted RRSP annuitants to extract funds from their RRSPs, that clearly did not work, and pocketed a share of the extracted funds. There was no error in his convictions for tax evasion notwithstanding that there was no evasion of his own taxes. The Quebec Court of Appeal stated:

The Cardoso judgment of this Court…establishes that allowing others, via a stratagem, to evade tax due, constitutes the actus reus of the offence of tax evasion; the offence is not limited to avoiding one’s own tax.

Neal Armstrong. Summary of Gagné v. R., 2017 QCCA 788 under s. 239(1)(d).