Réal Favreau

The appellant, a commuter train operator, appealed reassessments denying employment expenses for meals and lodging claimed under paragraph 8(1)(g) of the Income Tax Act for the 2014 and 2015 taxation years.

The Tax Court of Canada found that the appellant failed to establish that his duties required him to regularly travel away from the municipality and metropolitan area where he reported to work.

The court concluded that the deduction is not intended for employees who choose not to return home for personal reasons.

The appeal was dismissed without costs.

The appellant appealed reassessments for the 2008, 2009, 2010 and 2011 taxation years that included his online poker winnings as business income.

The Tax Court of Canada found that the appellant had the subjective intention of making a profit by engaging in poker activities and that he was using his expertise and abilities to earn his living through poker.

The Court concluded that the appellant's poker activities constituted a business and that his net earnings were taxable as business income.

The appeal for the 2008 taxation year was dismissed, and the appeals for the 2009, 2010 and 2011 taxation years were allowed in part to reduce the appellant's taxable income by agreed amounts.

The Respondent brought a motion for leave to amend its Reply to the Notice of Appeal to add an alternative argument based on the General Anti-Avoidance Rule (GAAR).

The Appellant opposed the motion, arguing it would suffer non-compensable prejudice because the corporate reorganization occurred 20 years ago and the non-resident shareholders who authorized it were no longer available to testify about their bona fide purposes.

The Tax Court of Canada granted the motion, finding that the amendment would assist in determining the real questions in controversy and would not result in non-compensable prejudice, as the Appellant's CEO had direct knowledge of the transactions and access to the relevant corporate records.

The appellant appealed reassessments for the 2008 to 2012 taxation years that included his net earnings from online poker activities as business income.

The Tax Court of Canada found that the appellant played poker in a non-recreational manner with the subjective intention of making a profit, organizing his life around the game and using objective standards of risk management.

The Court concluded that the appellant was operating a business and using his expertise to earn a living.

The appeal for 2008 was dismissed, while the appeals for 2009 to 2012 were allowed in part to reduce taxable income and allow a business loss, based on a partial consent between the parties.

The appellant appealed a determination by the Minister of National Revenue that a worker hired as a concierge was engaged in insurable employment under a contract of service from January 1, 2018, to September 17, 2018.

The Tax Court of Canada reviewed the relationship under the Civil Code of Québec and common law indicia, finding that despite the appellant's intention to create an independent contractor relationship, the objective reality demonstrated subordination, control, provision of tools, and integration into the appellant's business.

The appeal was dismissed, affirming the Minister's determination that the employment was insurable.

The appellant appealed the Minister's assessment denying a GST/HST New Housing Rebate for a property.

The Minister assumed the appellant did not acquire the property with the intention of using it as a primary place of residence.

The Tax Court found that the property was listed for sale shortly after possession as 'never been lived in', contradicting the appellant's claim of occupancy.

The appeal was dismissed.

The appellant appealed an assessment for the 2018 taxation year, arguing that wage loss replacement plan benefits received from his employer's plan should not have been reported as employment income on a T4 slip and should not have been subject to employment insurance premiums.

The Tax Court of Canada held that the benefits were paid in respect of employment and were properly included in income and considered insurable earnings under the Employment Insurance Act.

The appeal was dismissed without costs.

The appellant appealed a reassessment for his 2013 taxation year made beyond the normal reassessment period.

The Minister disallowed employment expenses claimed by the appellant, who had only professional income.

The Tax Court of Canada dismissed the appeal, finding that the appellant made a misrepresentation attributable to neglect by failing to verify his tax return and relying entirely on his accountant to claim employment expenses when he was not employed.

The appellant appealed reassessments for the 2009, 2010, and 2011 taxation years that included his net poker earnings as business income.

The Tax Court of Canada found that the appellant played poker in a non-recreational manner with the subjective intention to profit, organizing his life around the game and adopting objective standards of risk management.

The Court concluded that the appellant was operating a business and his poker earnings were taxable as business income.

The appeals for 2009 and 2010 were dismissed, while the appeal for 2011 was allowed in part to reduce his taxable income by $279,830 based on a partial consent regarding a specific tournament win.

The appellant appealed a reassessment for its 2013 taxation year made outside the normal reassessment period.

The Minister had disallowed maintenance and repair expenses and cumulative eligible capital deductions, and applied gross negligence penalties.

At the hearing, the respondent conceded that an invoice balance of $708,695.65 should be subtracted from the appellant's income.

The Tax Court found that the appellant knowingly made false statements by claiming fictitious expenses and that the Minister was justified in assessing beyond the normal period and imposing gross negligence penalties.

The appeal was allowed in part, without costs, solely to give effect to the respondent's concession.

The appellant appealed a reassessment adding a taxable capital gain to his income under the General Anti-Avoidance Rule (GAAR).

The appellant had transferred shares to his spouse through a series of transactions involving a gift and a sale, which reduced the capital gain attributed to him when the spouse subsequently sold the shares to third parties.

The Tax Court of Canada found that the sale of shares to the spouse was an avoidance transaction primarily undertaken for tax purposes.

The Court concluded that the transactions resulted in an abuse of the spousal rollover and attribution rules, and dismissed the appeal.

The appellant appealed an assessment under section 160 of the Income Tax Act regarding dividends paid to him by a corporation he controlled while it had an outstanding tax liability.

The appellant argued the dividends were consideration for management services he provided.

The Tax Court of Canada dismissed the appeal, applying established jurisprudence that a dividend is an allocation of profits related to shareholding, not consideration for services.

Consequently, the appellant was held jointly and severally liable for the corporation's tax debt.

The appellant appealed reassessments for his 2009, 2010, and 2011 taxation years, which denied net rental losses and included a taxable capital gain.

The Tax Court of Canada found that the appellant's rental activities had a personal element and were not carried out in a business-like manner, thus disallowing the rental losses.

The Court also held that the appellant was not entitled to the replacement property rollover for the capital gain because the property disposed of was a rental property, which is excluded from the definition of a former business property.

The appeal was dismissed with costs.

The appellant corporation appealed a reassessment that added a $31,500,000 capital gain to its income for the 2005 taxation year under the General Anti-Avoidance Rule (GAAR).

The appellant had engaged in a series of transactions, including the circular payment of capital dividends and cross-redemption of shares, to avoid the application of subsection 55(2) of the Income Tax Act and reduce the capital gain realized on the sale of its indirect interest in a pharmaceutical company.

The Tax Court of Canada found that while the transactions complied with the literal wording of the capital dividend account provisions, they frustrated the object, spirit, and purpose of subsection 55(2), which is intended to prevent the conversion of taxable capital gains into tax-free intercorporate dividends.

The appeal was dismissed.

The appellant appealed a reassessment that disallowed its deduction of $63,134 claimed as scientific research and experimental development (SR&ED) expenditures and an investment tax credit of $23,822 for the 2015 taxation year.

The projects involved the development of portable modular concrete panels and the improvement of a process for mixing and pouring concrete.

The Tax Court of Canada dismissed the appeal, finding that the activities did not meet the five criteria for SR&ED established in Northwest Hydraulic Consultants Ltd. v. The Queen.

The court concluded that there was no scientific or technical uncertainty, no systematic testing of hypotheses, no scientific method adopted, no scientific or technological advancement, and no detailed record kept.

The appellant mining company appealed a reassessment including a $28.2 million commitment fee and a $73.3 million non-completion fee in its income for the 1996 taxation year.

The fees were received following a failed merger attempt to acquire a target company with a significant nickel deposit.

The Tax Court of Canada dismissed the appeal, finding that the break fees were inextricably linked to the appellant's ordinary business operations of acquiring mineral deposits and were therefore taxable as income from a business.

The appellant, Emergis Inc., appealed reassessments for its 2000 and 2001 taxation years that disallowed deductions claimed under subsection 20(12) of the Income Tax Act for U.S. withholding taxes paid on interest income received from a U.S. partnership.

The Tax Court of Canada dismissed the appeal, finding that the U.S. tax paid could reasonably be regarded as having been paid in respect of income from a share of the capital stock of a foreign affiliate, thus triggering the exclusionary clause in subsection 20(12).

The appellant appealed redeterminations of her Canada Child Benefit (CCB) for the 2015 and 2016 base taxation years.

The Minister brought a motion to dismiss the 2015 appeal because the appellant failed to file a timely notice of objection, which the court granted.

For 2016, the Minister reassessed the appellant's CCB by including an $11,459 scholarship in her income, arguing she was a part-time student.

The appellant claimed she was a full-time student and the scholarship should be fully exempt.

The Tax Court of Canada found that based on objective criteria, the appellant was enrolled in a specified educational program as a part-time student.

The appeal was dismissed without costs.

The appellant appealed a GST assessment for unremitted net tax on the sale of a commercial property.

The buyer was not registered for GST at the time of the sale but was later retroactively registered to the date of the sale.

The Tax Court of Canada held that the retroactive registration created a presumption of continuous registration, satisfying the exception under paragraph 221(2)(b) of the Excise Tax Act.

The appeal was allowed and the assessment vacated.

The appellant estate appealed an assessment for unremitted GST/HST under the Excise Tax Act, holding the deceased jointly and severally liable as a director of a corporation.

The appellant argued the deceased was never validly appointed as a director, or alternatively had resigned, and raised a due diligence defence.

The Tax Court of Canada dismissed the appeal, finding that the deceased was a de jure director according to the Québec Business Register, the assessment was not time-barred, and the deceased failed to exercise the required degree of care, diligence, and skill to prevent the corporation's failure to remit taxes.