When the Procedural Vehicle Used Hides the True Nature of the Legal Recourse

By Sarah D. PinsonnaultIt is always important to look past the wording of the conclusions sought in an introductory motion and analyse the true nature of the legal action as a whole. In Rosenberg c. Agence du revenu du Canada, 2014 QCCA 1651, a motion to homologate a transaction presented before the Superior Court was ultimately deemed a legal proceeding that sought court orders to prevent the Canada Revenue Agency (“CRA”) from performing any inquiries into the Appellant’s tax affairs and potentially reassessing him. Given that this type of action falls within exclusive jurisdiction of the Federal Court under s. 18 of the Federal Courts Act, the Court of Appeal confirmed that the Superior Court had no jurisdiction over the matter. ContextIn February 2010, the Appellant and the CRA entered into an agreement whereby the CRA essentially reported that it was satisfied with the information the Appellant provided and agreed… Lire la suite

The Québec Court of Appeal Confirms the Tax Court of Canada’s Exclusive Jurisdiction in Claims Related to Income Tax Assessments

Par Sarah D. PinsonnaultRevenu Québec In Stephkan Holdings Inc. c. Agence du revenu du Canada, 2013 QCCA 1651, taxpayers are once again reminded that they cannot bypass the tax assessment appeal process set forth in the Income Tax Act by presenting motions before courts that lack jurisdiction over this subject matter. BackgroundA summary of the trial decision can be read here. In short, following an audit and tax assessments, the Appellants entered into an agreement with the Canada Revenue Agency (“CRA”) whereby the Appellants would be exempt from further adjustments for the tax years in question. Despite this, slightly more than a year later, the CRA issued notices of assessment to the Appellants.In response, the Appellants, inter alia, filed a motion before the Superior Court of Québec seeking the homologation of this agreement. Deeming this to be a “collateral attack on an assessment for federal tax”, the CRA then filed… Lire la suite

Penalties May be Imposed on Those who Show Reckless Disregard when Filing Their Taxes

Par Sarah D. PinsonnaultRevenu Québec It is not uncommon for individuals to have someone else prepare and filetheir tax returns for them. With the deadline for filing one’s taxes fastapproaching, the decision Jack c. La Reine, 2013 CCI 1 servesas a reminder of how one must exercise a reasonable degree of due diligencewhen filing his/her taxes. If one has shown reckless or careless disregard indoing so, penalties will be imposed and, in the opinion of the Tax Court ofCanada, justifiably so.  The taxpayer in this case, Ms. Jack, is a registered nurse, teacher, andsmall business owner. Prior to the separation from her husband in 2008, thatlatter was the one who prepared and filed all of her tax returns. All Ms. Jackwould do was sign the form; never asking any questions. It later became known that in these previous tax returns, variousincomes were never reported. In 2008, being no longer with… Lire la suite

The Superior Court’s Jurisdiction in Tax Matters

ParSarah D. PinsonnaultRevenuQuébec Although the Quebec Superior Court is a court of “original generaljurisdiction”, pursuant to section 31 of the Civil Code of Procedure (“C.C.P.”),it cannot hear a suit if another court has exclusive jurisdiction over thematter in question. In the recent case Stephkan Holdings Inc. c. CanadaRevenue Agency, 2013 QCCS 643, the Petitioners are thus prevented fromcircumventing the federal tax system by objecting to a federal income taxassessment before the Superior Court, because it is the Tax Court of Canadathat has the “exclusive original jurisdiction” over this subject matter inaccordance with section 12(1) of the Tax Court of Canada Act. Background The Petitioners and the Canada Revenue Agency (“CRA”) signed asettlement agreement, whose terms “provided that there would be “noadjustment to taxable income” for certain tax years” under the conditionthat the Petitioners carried out certain actions. Despite having performed thelatter, the Petitioners were nevertheless re-assessed for certain of the… Lire la suite