What kinds of cases are you looking for?    < Previous Case Collections — holding off on collecting on incorrect GST/HST assessmentGST/HST and income tax — real estate agent built home for personal useGST/HST — advertising servicesGST — air travel commissionsGST/HST — assessment of real estate agent on sale of condo was statute-barredGST — builder built home for personal useGST — builder of new home was not who CRA thought it wasGST/HST — Cancelling interest on "wash transaction"GST — cleaning up years of failure to charge GST on management feesGST — community centre constructionGST/HST — convincing CRA that it was too late to assessGST — corporation providing health care servicesGST/HST — couple built one home for sale and one to live inGST/HST — credit for net tax wrongly remittedGST — dental clinicGST — directors' liability (car dealership)GST — directors' liability (company dissolved)GST — director's liability (construction contractor)GST — director's liability (corporate lawyer)GST — directors' liability (person never agreed to be a director)GST — directors' liability (public company)GST — director's liability (restaurant owner)GST — directors' liability assessment — individual was never a directorGST — employee rebate more than 10 years backGST/HST — exported goodsGST/HST and income tax — family built home for personal useGST/HST — fixing a failed voluntary disclosureGST — full input tax credits allowedGST — getting CRA to honour a retroactive registrationGST — golf club membershipsGST — home renovation was not substantial renovationGST — input tax credits allowed without documentationGST/HST — input tax credits for GST incurred before registrationGST/HST — input tax credits for joint venture investmentGST/HST — input tax credits for legal fees on selling company sharesGST — input tax credits justifiedGST/HST — input tax credits — “medical” company was not making exempt suppliesGST/HST — input tax credits on bulk purchases of iPhonesGST/HST — input tax credits on inputs to exempt suppliesGST/HST — input tax credits on purchase of old home for new projectGST — input tax credits on land held for developmentGST/HST — input tax credits to charity for cost of landGST/HST — input tax credits where CRA had cancelled supplier's GST registrationGST/HST — input tax credits where invoices addressed to different company in groupGST — interest reduced to reflect offsetting rebateGST/HST — ITCs for joint venturerGST — liability of charitable institution for unremitted GSTGST/HST — litigation over real estate purchaseGST/HST — mail processing company ruinous assessment avertedGST — medical devicesGST — miscellaneous adjustmentsGST/HST — new housing rebateGST/HST — net tax refund approvedGST/HST — no HST on settlement received but ITCs on termination paymentGST/HST — no "substantial renovation" of apartment buildingGST — partnership assessment was out of timeGST — purchase of real estateGST/HST — purchases by President as agentGST — rebate for ship towed out of the countryGST/HST — rebate to builder of student residenceGST — recognizing when a second objection had to be filedGST/HST — recovering HST not paid on sales incentivesGST/HST — recovering tax from customers after CRA assessmentGST — reducing assessment by almost 90%GST/HST — reducing assessment on self-supply of new homeGST — registrants were not associatedGST — reopening audit after expiry of appeal periodGST/HST — resolving dispute between buyer and seller of landGST — retroactively deeming a business to be GST-registeredGST — sales of condominiumsGST — school board's liability eliminatedGST — services to insolvent companies were zero-ratedGST/HST — services to US company were zero-ratedGST/HST — services were zero-ratedGST/HST — showing purchaser that real estate sale was exemptGST — stopping a client from being driven out of businessGST — summer camp teaching English as a second language was exemptGST — tax on purchase of commercial propertyGST — tire installer neglecting to bill GSTGST — townhouse renovationsGST/HST — valuation of student residenceGST — voluntary disclosure — negotiating interest relief and income tax offsetGST — voluntary disclosure acceptedGST — voluntary disclosure of GST collected on commercial rentsGST — voluntary disclosure of management feesGST — waiver of interestGST — waiver of interest and penaltyGST — waiver of penaltyGST — wash transactionGST — were courses educational or recreational?HST and the Ontario Staycation Tax Credit — correcting the provincial government’s misunderstandingPST — director's liabilityPST — directors' liability (car dealership)PST — directors' liability re data conversion projectPST — eliminating assessment for tax collected by franchisorPST — invoices written up incorrectlyPST — reducing tax on sale of book with CD-ROMPST — refund of tax on supermarket constructionIncome tax — $2 million payment on retirement was tax-freeIncome tax — another refund where return filed lateIncome tax — assessment for transfer by tax debtorIncome tax — auditor demanding too muchIncome tax — builder built home as personal residenceIncome tax — cancelling source deductions assessmentIncome tax — capital gains vs. incomeIncome tax — charitable donation of kidney beansIncome tax — charitable donation to US religious schoolIncome tax — child support deductionIncome tax — claiming business losses from past yearsIncome tax — companies were not carrying on Personal Services BusinessIncome tax — consequential reassessment of spouse was statute-barredIncome tax — corporation was bare trusteeIncome tax — cost of building home proven without receiptsIncome tax — costs of mother's Notice of Objection deductibleIncome tax — CRA chasing widow for deceased's RRSPIncome tax — deduction for Power of Attorney feesIncome tax — donations to suspect charity allowedIncome tax — expenses against unreported incomeIncome tax — expenses of setting up a film shelterIncome tax — general anti-avoidance ruleIncome tax — getting the $500,000 capital gains exemptionIncome tax — getting Third Level Fairness reviewIncome tax — income from UN agency was tax-freeIncome tax — income not earned personallyIncome tax — intercompany charges deductibleIncome tax — liability of deceased's estate for UK pension incomeIncome tax — no tax on litigation settlementIncome tax — non-resident tax on rental incomeIncome tax — officers of company were acting as outside sales reps, not employeesIncome tax — over-intrusive auditIncome tax — professional fees deduction allowedIncome tax — refund to non-resident sellers of propertyIncome tax — refunds where returns filed lateIncome tax — "reserve" was not a reserveIncome tax — RRSP on deathIncome tax — sale of condo was not a "flip" for profitIncome tax — sale of rental property by non-residentIncome tax — tax savings on selling homeIncome tax — taxpayer did not realize she was non-resident and exempt from Canadian taxIncome tax — trust for disabled childIncome tax — voluntary disclosureIncome tax — wages of family members were deductibleIncome tax — waiver of RRSP penalty taxIncome tax — waiver of TFSA penalty taxIncome tax — withholding tax on deemed dividendIncome tax and GST — real estate agent's business expensesCollections — execution preventing sale of propertyPayroll withholdings — directors' liability (company dissolved)Payroll withholdings — directors' liability (public company)Payroll withholdings — penalty for late remittanceYour problem goes here Next Case > Income tax — refund to non-resident sellers of property My clients were a couple that had left Canada 20 years earlier but still owned their former home in Canada. They used the home as a vacation property for a few years, then rented it out for several years, then sold it in 2021. They had no gain on the sale; taking renovation costs into account, they actually lost money. On the sale, as required by section 116 of the Income Tax Act, the real estate lawyer held back 25% of the sale price pending getting a certificate from the Canada Revenue Agency confirming that any required tax on the capital gain had been paid, and held this $350,000 in trust for the purchaser (since it is the purchaser who is supposed to remit such amounts to the CRA). Due to a misunderstanding, my clients did not then take the necessary steps to apply for a “section 116 certificate” so as to not have to actually pay the $350,000. Two years later, the CRA demanded $700,000, which was 50% of the sale price, from both my clients and the purchaser, since the holdback required on depreciable property is 50% and the property had been used as a rental. My clients’ lawyer contacted me for help. I got in touch with the CRA official handling the matter. She was refusing to issue a section 116 certificate because too much time had passed, and was insisting on payment of a further $350,000 in addition to the amount the lawyer was holding in trust. I promptly wrote a detailed letter to the CRA official, sending in the $350,000 being held in trust along with a request to reduce the section 116 demand to 25%, given that my clients had not claimed any capital cost allowance on the property. I showed that this would be consistent with stated CRA policy as announced at a conference a few years earlier. I also showed that there was no capital gains tax actually payable — in fact, my clients would be getting a full refund of the $350,000 — and asked CRA to waive the interest and penalty that would be charged. I also sent CRA my clients’ non-resident income tax returns for 2021, showing that they had a capital loss on the property rather than a capital gain, and so no tax to pay. CRA took close to a year to audit and resolve this matter, including raising concerns about tax not paid on the rental income, which I solved separately (see “Income tax — non-resident tax on rental income”). I had to explain the facts to the auditor to ensure that the returns would be processed and refunds issued. Even when the refunds were ready to be paid, CRA tried to deposit them to an old bank account my clients had had in Canada many years earlier, and it took some time to clear that up and have CRA mail cheques to their US address. In the end, my clients got their $350,000 of refunds and were very happy Problem solved! (2024)