Jeff Pniowsky

The appellants engaged in a series of transactions to extract corporate surplus tax-free using their lifetime capital gains exemptions.

The Minister reassessed them under the general anti-avoidance rule (GAAR), adding dividend income to their 2013 and 2014 taxation years.

The Tax Court of Canada dismissed the appeals, finding that the transactions frustrated the object, spirit, and purpose of section 84.1 and subsection 89(1) of the Income Tax Act, constituting abusive tax avoidance.

The Minister assessed the Appellant using the net worth method for failing to report substantial income from his contracting business and rental properties in the 2009, 2010, and 2011 taxation years, and imposed gross negligence penalties.

The Tax Court found the Appellant was not a credible witness and upheld the net worth assessments, subject only to specific concessions made by the Respondent regarding personal expenditures.

The Court also upheld the gross negligence penalties, finding the Appellant knowingly understated his income.

The 79 Appellants brought a motion for an Order allowing their appeals, arguing that a delay in the hearing of their appeals, caused by the Respondent's conduct in related informal lead cases (Choptiany et al.), constituted an abuse of process.

The Appellants had participated in the Fiscal Arbitrators or DeMara Consulting tax schemes and were assessed gross negligence penalties.

The Court dismissed the motion, finding that the Respondent's conduct in the informal lead cases did not constitute an abuse of process with respect to the 79 Appeals.

The Court noted that the determination of a taxpayer's liability for gross negligence penalties is fact-specific and that the informal lead cases were never intended to be dispositive of the 79 Appeals.

The Appellants participated in the Global Learning Gifting Initiative (GLGI) program and claimed charitable donation tax credits for both cash contributions and educational courseware licenses.

The Minister reassessed to deny the credits.

The Appellants conceded the gift-in-kind receipts were invalid but appealed to claim the cash contributions.

The Tax Court of Canada dismissed the appeals, finding that the GLGI program was a single interconnected arrangement designed to enrich participants.

The Court held that the Appellants lacked donative intent when making the cash contributions, and that subsections 248(30) to (32) of the Income Tax Act do not displace the common law requirement for donative intent.

The appellants brought a motion to have their appeals allowed due to the respondent's repeated failures to comply with discovery rules and court orders.

The Tax Court of Canada found that the respondent engaged in a deliberate pattern of non-compliance, including failing to provide knowledgeable nominees for examination and failing to disclose relevant documents.

Concluding that no less drastic remedy would ensure procedural fairness, the Court allowed the motion and the appeals with costs.