In common law the doctrine of rectification operates to correct mistakes in transactions that produce unintended or adverse results. Since 2000, Juliar v. A.G. (Canada (2000), 50 OR (3d) 728 ONT. CA) (“Juliar”), has been the leading case on tax rectification in Canada.
The articles on this website reflect the authors understanding of the law at the time the article was written. The rules in tax law change regularly and the enclosed articles should be read for information purposes only. They do not necessarily represent the current state of the law. The Law must be applied to a particular set of facts. It is unsafe to draw conclusions about a particular set of facts without having them reviewed by a specialist.
Current Trends in Audit Procedures: A review of the general rules and what to look out for with potential criminal investigations.
This article discusses trends in the Canada Revenue Agency (the “CRA”) audit process that resulted from reports from the Auditor General of Canada that were critical of the CRA. The article provides guidance on how to approach an audit, dealing with CRA officials and factors that might indicate that audit could become a criminal investigation. Various audit programs are described using the terminology that existed for those programs in 2007.
Questions and Canada Revenue Agency Responses
This article is a summary of a CRA round table discussion held at the 2009 British Columbia Canadian Tax Foundation Conference in Vancouver, British Columbia. The round table provides practitioners and CRA officials an opportunity to discuss CRA policies on matters that regularly arise in daily practice. In 2009 the CRA commented on valuing private corporation shares, the internal reorganization of the CRA, the developments in the Voluntary Disclosure Program the value of the Tax Ombudsman’s office, obtaining Clearance Certificates for foreign property, the CRA’s assessment practice with respect to gross negligence penalties, and document retention at the end of audits.
Proving Business Expenses: Checklists and Commentary (2012)
This article provides an analysis of the case law explaining when an expense is deductible for business purposes and the methods the courts apply in making that determination. It also describes some unusual categories of business expenses; the CRA’s assessing policies and whether the policies are consistent with the case law. The paper is meant to provide guidance to practitioners and taxpayers in a common issue in CRA audits.
Making Corrections to Trusts; Comparing Variations, Rectifications and Hastings Base (2013)
This article summarises the methods available to trustees and trust beneficiaries for correcting mistakes related to the creation of family trusts. The most commonly used methods are described and the advantages and disadvantages to each are set out. The paper focuses on practice before the British Columbia Supreme Court.
When isn’t Negligence Gross? Struggles with the Standard of Care (2014)
CRA auditors regularly assess gross negligence penalties. The concept of gross negligence is discussed from a historical perspective and in relation to 2014 CRA audit policies. The paper further discusses negligence in tax law, and the standard of care required by taxpayers when preparing and filing their tax returns and the onus of proof the CRA must meet when assessing gross negligence penalties.
Deductible Expenditures – What Are the Rules?
At an organising meeting for the 2012 B.C. Canadian Tax Foundation Conference I commented that a discussion of business expenses would be a good addition to add to another proposed paper. Before I could gather my wits I was being volunteered by Mr. Chapman1 to write a paper on the topic. Over the next several meetings it became apparent that Mr. Chapman was actually only interested in having someone tell him that all of his business travel expenses are still deductible, even when a business trip somehow involved tickets to a concert.2 Unfortunately, in the interim period, the proposal mutated into a completely unwieldy origami sculpture of subtopics, income tax provisions, case law and conflicting CRA policy statements.