Introduction: Derivative Tax Liability & Section 160 of Canada’s Income Tax Act The derivative tax rule in section 160 of Canada’s Income Tax Act prevents tax debtors from trying to hide assets from the Canada Revenue Agency’s tax collectors by transferring those assets to spouses, friends, relatives, related corporations,...
Introduction: Stack v The King, 2024 TCC 137 In Stack v The King, 2024 TCC 137, the Tax Court of Canada blocked the Canada Revenue Agency’s attempt to obtain various documents, including an email record, that were protected by solicitor-client privilege. Although the taxpayer’s accountant was one of the...
Key Takeaway (Updated June 2026): Casual or recreational poker winnings remain non-taxable in Canada as windfalls. However, if you treat poker as a full-time or primary livelihood—with sustained profits, systematic organization, and financial dependence—the CRA will likely tax your net winnings as business income. This is now settled law...
Introduction: Statute-Barred Tax Years & Statute-Barred Tax Audits Canada’s Income Tax Act sets out a “normal reassessment period,” after which the Canada Revenue Agency generally cannot reassess a person’s taxable income or tax payable. For most individual taxpayers, the normal reassessment period expires three years from the date that...
Introduction: Settling Tax Litigation in Canada Tax settlements play a vital role in tax administration and enforcement. It would be burdensome and impractical to litigate every tax dispute in Tax Court. When entering settlement discussions with the Canadian tax-litigation lawyer for the Canada Revenue Agency, taxpayers must carefully assess...
Penalties Canada’s tax statutes contain various penalties that seek to curb non-compliance. A gross-negligence penalty aims to punish a taxpayer whose conduct “involves a high degree of negligence tantamount to intentional acting, an indifference as to whether the law is complied with or not”: Venne v R., 84 DTC...