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3 September 2020- 9:55pm Mamdani Family Trust – Tax Court of Canada finds that a taxable dividend was to be valued at its pre-tax amount for s. 160 purposes Email this Content An inter vivos family trust received over $3.5 million in taxable dividends from a wholly-owned Canadian private corporation (“Global”) at times that Global had unpaid income tax liabilities. ... He went on to indicate that, even in the absence of Gilbert, he would not have been convinced by the evidence of the taxpayer’s valuation expert given inter alia that “if a corporation has declared a dividend, the dividend belongs to the holder of the share on which the dividend was declared, such that the corporation is not in a position to sell that dividend to someone else” – so that the usual test of what the property could sell for was simply inapplicable. ...

14 January 2021- 10:53pm Ifi – Federal Court finds that CRA unreasonably refused to cancel tax under s. 207.06(1) on the basis of a “repeated” mistake that in fact was new Email this Content In 2009, the taxpayer (Ms. ... The excess contribution in 2014 … was tied to Ms. Ifi’s status as a non-resident. ...

20 January 2021- 10:53pm Spiegel Sohmer – Court of Quebec finds that reimbursing expenses for the wedding of a law firm partner’s daughter generated a non-deductible taxable benefit Email this Content In 1994, Grunbaum found that expenses incurred by the corporate taxpayer as a result of inviting business guests to a wedding reception held in honour of the daughter of a shareholder were incurred by it for the purpose of gaining or producing income from its business. ... Agence du revenu du Québec, 2021 QCCQ 69 under s. 18(1)(a) – income-producing purpose. ...

24 May 2021- 11:04pm Lauzon – Federal Court rejects an unjust enrichment claim by a taxpayer claiming he had not received refund cheques Email this Content The taxpayer alleged that he had not received cheques for refunds claimed in his returns for his 2005 and 2006 taxation years, which CRA’s records showed as having been paid, and brought an action against CRA in 2018 for unjust enrichment on the basis that it had not in fact received the refunds. ... Canada (Revenue Agency) 2021 FC 431 under General Concepts – Unjust enrichment and s. 248(7). ...

8 June 2021- 11:15pm 2276230 Ontario – Federal Court states that a CRA requirement for information need not be demonstrated by it to be proportional to the matter at issue Email this Content CRA had requested that three taxpayers provide information (characterized by it as routine business information) pursuant to ETA s. 288(1) (similar to ITA s. 231.2(1)) and when many of the requests were either not answered at all or only partially by the last of the extended deadlines, it sought a compliance order. Before granting the compliance order, Pentney J cited (at para. 19) Cameco for the proposition that “the fact that the requests may involve substantial documentation which the taxpayer may view as not proportional to the matter is not a relevant consideration,” and further stated (at para. 29): [T]here is no evidence to suggest that the CRA audit has been launched for any purpose other than to ensure compliance with the ETA, or that the request for information was so wide, extraordinary, or unusual as to give rise to questions about its legitimacy in the context of the audit (assuming that such a claim could be brought, in the face of the wide authority granted to the Minister to set the timing, scope, and nature of the audit …). ...

4 August 2021- 10:59pm Alexion – Federal Court of Appeal indicates that, post-Vavilov, Courts should no longer “cooper up” administrative decisions under review Email this Content The Patented Medicine Prices Review Board found that the appellant (Alexion) had priced a drug (Soliris) excessively given that the list price was higher than the price in one of the seven countries used for comparison purposes. ... This sometimes put reviewing courts in the invidious and uncomfortable position of acting as a ghostwriter for administrators, coopering up their decisions. … Vavilov recognizes the shortcomings in the former law and fixes them. ...

18 August 2021- 11:07pm Nadeau – Court of Quebec finds that lump sums paid pursuant to a CBCA oppression action of two terminated shareholder-employees were retiring allowances Email this Content The Superior Court of Quebec found: that the two taxpayers, who were minority shareholders, employees and directors of a private family corporation (“Comairco”), were the victims of oppression in that they had been summarily dismissed from their positions in order that their sharing in the profits of Comairco through bonuses and dividends could be substantially reduced; and that their suit for oppression pursuant to s. 241 of the CBCA should be answered inter alia through the Court’s order that the shareholding of each be redeemed for $4.5 million and that they be paid lump sums (of $65,000 and $50,000, respectively) by reason of their wrongful dismissal. ... Agence du revenu du Québec, 2021 QCCQ 4638 under s. 248(1) – retiring allowance. ...

23 August 2021- 11:33pm Tellza – Federal Court finds that it was not unreasonable for CRA’s to exercise its audit power by requesting a copy of all electronic records for a 20-month period Email this Content CRA issued a letter to Tellza under ETA s. 288(1) (similar to ITA s. 231.1(1)) to obtain all of Tellza’s electronic accounting data for a 20-month period. ... After having noted that the word “document” (used in s. 288(1)), was effectively defined in s. 123(1) to include “any other thing containing information, whether in writing or in any other form ” (her emphasis), she also rejected the contention of Tellza that “the request for records in an electronically readable format, along with the system administrator’s user ID and password, where applicable, falls outside the scope of the inspection power in the ETA s 288(1).” ...

30 August 2021- 11:04pm Dupuis – Quebec Court of Appeal notes that there is no time limit for a notice of objection to be responded to Email this Content The taxpayer argued that the ARQ, in taking over three years to reassess in response to its objections, had failed to act with “all due dispatch” as required by the Quebec equivalent of ITA s. 165(3). The Court noted that the taxpayer had the option of appealing directly to the Court of Quebec after 180 days, or seeking a waiver of interest that accumulated due to undue delay (here, in fact, the ARQ had waived 16 months’ interest), and then stated: The fact that no time limit is set for the assessment in response to a Notice of Objection is a deliberate choice by the legislature and is understandable. … The Court of Quebec, like the Tax Court of Canada, has made it clear on numerous occasions that its powers do not include the power to set aside a notice of assessment on the basis that the Minister has not acted with dispatch. ...

7 September 2021- 11:33pm Kallis – Tax Court of Canada adopts a restrictive interpretation of what constitutes a money-lending business Email this Content The taxpayer used funds that he had generated from a successful career in the oil and gas industry to make interest bearing loans to third parties. ... The Queen 2021 TCC 58 under s. 18(1)(b) – capital loss v. loss- debt. ...