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Welcome to Recent Developments

Here I will be posting about recent developments in Canadian tax law. I will post periodically so please check this section often.

- David M. Piccolo
 

CRA Auditor Gets Audited

On September 22, 2011, the Federal Court of Appeal delivered its judgment in Lubega-Matovu. In this case, the appellant was a CRA auditor who also operated a number of side businesses and also rented a portion of his house. CRA audited Mr. Lubega-Matovu with respect to the expenses he claimed he incurred to operate these side businesses and rental property. CRA had denied certain expenses claimed against the income from these side businesses and had also assessed him with gross-negligence penalties.

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Another Tax Preparer Convicted

On June 10, 2011, the Toronto Star reported that a Brampton tax preparer was sentenced to three years in prison for preparing tax returns for clients using fake charitable donation receipts. Eric Ammah was a partner in E&F Tax Associates and Bankay Financial Services and was convicted for tax returns prepared for the 2004 through 2006 taxation years. Mr. Ammah was convicted for preparing tax returns for approximately 30 clients over those three years, which amounted to more than $34 million in fake charitable donation credits and more than $9 million in reduced taxes or refunds.

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New Relief May Be Available

On June 2, 2011, the Federal Court of Appeal released it decision in Bozzer. In that case, the taxpayer sought to apply for relief under the taxpayer relief provisions for a tax liability that arose in the 1989 and 1990 taxation years. The CRA denied his request for relief on the basis that the Income Tax Act did not provide them with the ability to provide relief for tax liabilities that arose in taxation years more than 10 years before the year the request was made. The Federal Court of Canada upheld CRA’s decision. However, the Federal Court of Appeal disagreed with CRA and the Federal Court and ruled in favour of the taxpayer.

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