Articles 2023

In the recent Tax Court decision in McKenzie v. The Queen, 2013 TCC 239, Justice Hershfield considered the contextual component of the objective due diligence test, reviewing an important part of a director’s defence against liability under section 227.1 of the Income Tax Act.

Corporate loss streaming rules have been extended to trusts. This article discusses the new trust loss streaming rules, particularly as the rules affect investment fund trusts.

In a recent case on gross negligence penalties, Morton v. The Queen, the Tax Court of Canada took a common sense approach to a taxpayer's technical legal arguments with regard to his abusive behaviour.

The new rules on restrictive covenants, after a decade of discussion, have been law for less than a year. This article discusses operation of the rules and some potential issues.

The author provides highlights of matters discussed at the 2013 Tax Court Bench and Bar Committee meetings. This review will be of particular interest to practitioners who advocate for taxpayers.

The Federal Court of Appeal recently addressed the role of a unanimous shareholders' agreement in determining control of a corporation in the context of deciding whether it qualified as a CCPC. The specific issue in the case was the availability of SR&ED input tax credits, though the Court's decision regarding shareholders' agreements has broader implications for determining control and CCPC status.

Brent Kern applied the watershed decision of the Federal Court of Appeal in R. v. Sommerer. The traditional positions of the parties were reversed, with the Minister of National Revenue arguing that subsection 75(2) of the Income Tax Act did not apply to the Appellant, and the Appellant argued that it did apply.

The CRA recently introduced its Offshore Tax Informant Program (OTIP), which aims at protecting against international tax avoidance/evasion. Unfortunately, uncertainties stemming from the CRA’s guidance documents leave open a number of important questions about the new program.

The Supreme Court's recent decision in AES/Riopel makes clear that a remedy similar to common law rectification is available in Quebec. Although the case focuses on the civil law, it also provides both comfort and a list of caveats for taxpayers in the common law provinces.

The Federal Court of Appeal recently released reasons for this case. The detailed judgment reviews the instances in which a taxpayer may bring an application for judicial review of CRA actions before the Federal Court.