Tax Topics - October 2012


In This Issue:

- Crime And (No) Punishment: Julie Guindon V. Her Majesty The Queen

- Section 163.2 . . . . . . 2

- Section 163.2 as a Criminal Penalty . . . 3

- The Application of Section 163.2 to the Taxpayer . . . 3

- Implications of the Decision . . . 4

- Notice of Ways and Means Motion Tabled . . . 5

- Mandatory Electronic Filing for Tax Preparers Questions and Answers . . . 5

- Court Appointments . . . 6

- CCH’s Income Tax Act and Regulations on CCH Online and DVD . . . 6

- Recent Cases . . . 6

- Excerpt From: Crime And (No) Punishment: Julie Guindon V. Her Majesty The Queen:

The Tax Court of Canada recently released its decision in Guindon, a case concerning the application of third-party penalties under section 163.2 of the Income Tax Act (the “Act”). The Court found that the penalty imposed under section 163.2 of the Act is a criminal penalty, not a civil one, and therefore subject to the same constitutional protections as other penal statutes enacted by the federal government.

Facts -

The case involved an unsuccessful “leveraged donation” plan whereby participants were to purchase “vacation ownership weeks” (“VOWs”) in a Turks and Caicos Islands time-share resort and subsequently donate the VOWs to a registered charity called Les Guides Franco-Canadians District d’Ottawa (the “Charity”). The participants were to acquire the VOWs from a trust in exchange for a vendor takeback note of $3,248 and subsequently donate the VOWs to the charity at the purported fair market value of $10,825, for which they would receive a charitable receipt.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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