What kinds of cases are you looking for?    < Previous Case Collections — holding off on collecting on incorrect GST/HST assessmentGST/HST — Advertising servicesGST — air travel commissionsGST — 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 — 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 — 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 on bulk purchases of iPhonesGST/HST — input tax credits on inputs to exempt suppliesGST — input tax credits on land held for developmentGST/HST — input tax credits where CRA had cancelled supplier's GST registrationGST — interest reduced to reflect offsetting rebateGST — liability of charitable institution for unremitted GSTGST/HST — litigation over real estate purchaseGST — medical devicesGST — miscellaneous adjustmentsGST/HST — new housing rebateGST/HST — net tax refund approvedGST/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 — 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 — 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?PST — 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 — corporation was bare trusteeIncome 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 — officers of company were acting as outside sales reps, not employeesIncome tax — over-intrusive auditIncome tax — professional fees deduction allowedIncome 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 — 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 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 > GST — input tax credits allowed without documentation Under the GST, businesses can generally claim input tax credits (ITCs) to recover all GST that they pay. The Excise Tax Act (ETA) requires that a registrant have documentation from suppliers to claim ITCs, including most notably the supplier's GST registration number on invoices. Countless appellants have had their Tax Court appeals dismissed for lack of such documentation. My client had appealed his GST assessment on his own, and (as is often the case with such clients) did not know what he was doing. Through a fortuitous contact, he was referred to me shortly before his case was to be heard. He first came to see me 11 days before the scheduled trial date. Mr. X was a house builder who built a home in 1991. Due to confusion about the transitional rules when the GST first came into force, he thought that this sale did not bear GST, and so he did not collect GST. Two years later, when he moved, he threw out the original contractors' and suppliers' invoices, not realizing that he needed to keep them for a possible GST audit. In 1994, Mr. X was audited, and was assessed for failing to collect and remit GST on the new home sale. The assessment was simply for 7% of the sale price of the home, with no allowance for ITCs. The auditor never explained to Mr. X that if he could substantiate claims for ITCs, the assessment could be reduced significantly. Mr. X filed a notice of objection, and the assessment was confirmed. He then filed an appeal to the Tax Court (which, in the Informal Procedure, can be done with a simple letter to the Court). He took the position that he should be allowed ITCs against the assessment, but throughout the entire process he never really understood what he needed to do to prove his case. When I first met with Mr. X, I thought his case was hopeless, since he had virtually no copies of suppliers' invoices, and over 8 years had passed since he had built the home. However, as we explored the issues, a few interesting facts emerged. Clearly the home had cost a measurable amount to build (after all, the home was standing, and Mr. X's contract with the purchaser was clear evidence of the home's size and value when built). Mr. X could estimate the construction costs quite accurately, as he had built many other homes of similar size. He was an exceptionally credible witness, and the Court would believe that he had incurred the expenses and paid GST on the construction costs. He would be able to testify that he had had all the invoices, but had thrown them out. And he was still on good terms with many of the subcontractors and materials suppliers. From these facts emerged a plan of action. I sent Mr. X off to contact all the suppliers he could still find. None of them would have records from 8 years ago, of course. But several of them remembered him and the project well enough that they were willing to sign a letter confirming that they recalled doing the work or providing materials, that they believed Mr. X's estimate of $X for such supply was accurate, and that they were registered for GST in 1991 and had collected and remitted GST on their invoices at that time. The documentation was still scanty, but we had an interesting technical argument to make. Mr. X and I met with the Department of Justice lawyer who would be representing Revenue Canada in Tax Court. At this point we were two business days before the court date. We presented the facts to the Justice lawyer. It was evident that my client was credible, and that the fact he had expended the funds and GST in building the home would likely be believed by the Court. The technical argument I made was based on the wording of subsection 169(4) of the ETA. This subsection is generally thought to mean that, in any dispute with Revenue Canada over ITCs, the registrant must be able to produce the documentation. I showed the Justice lawyer that, when the legislation is read carefully, it is sufficient that the registrant have had the documents at some time in the past, rather than having them at trial! If the witness is credible enough that there is no real dispute that he incurred the expenses, the technical requirement of subsection 169(4) is met if the Court believes that the registrant had obtained the documents at some point in the past, even though he later threw them out. After some negotiating, the Justice lawyer, and his client Revenue Canada, agreed. We settled the appeal without going to trial, on the basis that the assessment of my client was valid but that he should be allowed offsetting input tax credits for his construction costs. In return, we abandoned the arguments that the GST should be calculated as 7/107 rather than 7% and that the new housing rebate should be allowed. The net effect was to cut the cost of the assessment by more than half, a trial was avoided, and everyone went away happy. The Justice lawyer told Mr. X that, if Mr. X had come to the meeting with any other tax professional in the city, his case would have been lost. My novel and creative argument allowed my client to obtain a substantial reduction in the assessment. (1998)