The Penny Drops


It is common knowledge that taxation authorities around the world are playing catch up with the developments of new technology. One of the most interesting areas of such ongoing technological development has been the advent of Bitcoin. But at least in the case of Bitcoin it seems that the Income Tax Act’s broad general definitions mean the Department of Finance is ahead of the game for once. Bitcoin is a type of virtual currency. It is not issued by any central bank nor subject to…

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Supreme Court Rules Against Director of a Charity


By:  Adam Aptowitzer As Counsel for Ms. Guindon in her case with the Minister of National Revenue we have kept our readers abreast of developments as the appeal wended its way to the Supreme Court of Canada. On July 31st, 2015 the Supreme Court issued its ruling in the matter thus ending the appeal for Ms. Guindon. The Supreme Court found that Ms. Guindon was indeed civilly liable for her actions related to the issuance of tax receipts by a charity. By way of reminder,…

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Charter Protection Cannot be Taken for Granted


By: Adam Aptowitzer It is almost trite to say that the Canada Revenue Agency is dedicated to the administration of the income tax system in this country. There are exceptions to this, of course, the most obvious being the regulation of charities. However, a recent amendment to the Income Tax Act giving the CRA new powers may have gone beyond adding ancillary duties and created a secondary mandate for the agency. New subsection 241(9.5) requires the Agency to deliver evidence of certain criminal code offences…

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An Oscar Worthy Performance


By: Adam Aptowitzer Readers will likely agree that the study and practice of taxation can be both interesting and, at least at times, exciting. It is therefore surprising that there are not more movies featuring tax lawyers and accountants. One would imagine these movies would show a tax litigator with a well-muscled calculator finger fighting off the faceless hordes of CRA auditors to free the unjustly reassessed taxpayer in distress. Yet, despite the self-image of those in private practice as the Luke Skywalkers of the…

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Tax Litigation and the Veil of Secrecy


There are many lawyers in the country who chafe at the name appropriated by the Department of Justice given the Orwellian connotation that it has a monopoly on its dispensation.  In reality, the DoJ is the law firm for the federal government and thus acts as other law firms, providing advice to all government departments.  That advice is either accepted or ignored by their clients.  But unlike lawyers of the private bar whose paramount duty is to their clients DoJ lawyers must (or at least…

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Considering Costs in Estate Litigation

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A recent judgment from the Ontario Court of Appeal provides a good reminder to factor in the risk of paying costs before deciding whether to litigate a matter. In Sawdon Estate v Watch Tower Bible and Tract Society of Canada et al.[1], the court awarded a type of ‘blended’ costs that are outside the usual rules of estate litigation cost awards. The judgment is also a good object lesson in the types of considerations a judge may take into account when deciding costs. The facts…

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Fighting Back


By: Adam Aptowitzer One does not need to be a tax lawyer to be familiar with stories of CRA officials using their office and abusing their power to cause problems for their fellow citizens.  Obviously, the vast majority of CRA representatives act in a professional manner but a small number of miscreants can cause such dramatic and catastrophic consequences for otherwise law-abiding citizens that their tales of woe colour the reputation of the entire Agency. And indeed, the power the CRA has over everyday individuals…

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Bolting the Barn Door After It’s Burned to the Ground


By:  Adam Aptowitzer In a report entitled “Donor Beware”[1] the Tax Ombudsman opined on the CRA’s administrative responsibilities regarding charitable donation tax shelters. Perhaps the most surprising thing about the report is that it is dated March 19th, 2014 after years of legislative implementation of tools for the CRA to crack down on tax shelter promoters, charities, directors of charities and donors connected with such plans. As far as we can tell most offensive tax shelters seem to be shut down albeit leaving several large…

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Guindon Case on Section 163.2 Penalties Headed to Supreme Court


By: Alexandra Tzannidakis  The Supreme Court of Canada has granted Julie Guindon leave to appeal from a Federal Court of Appeal decision that held section 163.2 penalties against tax advisers are not “penal” and therefore do not attract section 11 Charter rights. Our readers may recall that we have written about this important case in the past.[1]  Ms. Guindon was assessed penalties amounting to $564,747 under section 163.2 of the Income Tax Act on the basis that she knew or would have known but for…

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The Dire Consequences of Failing to ‘Continue’ to the New Federal Not-for-profit Corporations Act

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Advisers acting for federal not-for-profit corporations take heed: you have a deadline of October 17, 2014, by which to switch over (or “continue”) to the new Canada Not-for-profit Corporations Act. The changeover period has been running since 2011 and this year is your last chance to comply… and yet, less than 10% of affected corporations have actually taken the plunge. So, let us put this another way. On October 18, 2014, Corporations Canada will start dissolving corporations. How Dissolution Will Work Dissolutions will be based…

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