Letter to Eugene P. Rossiter January 20, 2023
The Honourable Eugene P. Rossiter
Chief Justice of the Tax Court of Canada
200 Kent Street
Ottawa, ON K1A 0M1
Dear Chief Justice Rossiter,
FILE 2018-559(IT)G
The current e-mail is being forwarded to your attention as allowed per the link
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I am writing as a shareholder of a public company of which one of its affiliate has been initially notified by the Canada Revenue Agency ("CRA") in 2014 of TAX NOTICES OF REASSESSMENT relating to the taxation years 2008 to 2013, as indicated below.
Contingency
An affiliate of the Company received, from the Canada Revenue Agency (“CRA”) and provincial tax authorities, tax notices of reassessment relating to the taxation years from 2008-2013, which deny the application of noncapital losses, capital losses and scientific research and experimental development (“SR&ED”) tax credits claimed. As previously disclosed, the Company has filed notices of objection with the CRA and provincial taxing authorities. The CRA reassessment and related total liabilities are approximately $45 million. The Company has paid the required deposit of $19.6 million to the CRA, and no further amounts are due at this time. As of June 30, 2015, there has been no change to status of these matters and they are expected to take a number of years to be resolved. The Company, the affiliate and its counsel believe that the filing positions adopted by the affiliate are appropriate and in accordance with the law. The affiliate intends to vigorously defend such positions. If the affiliate is successful in defending its positions, the deposits made plus applicable interest will be refunded to the affiliate. There is no assurance that the affiliate’s objections and appeals will be successful. If the CRA and provincial tax authorities are successful, the affiliate will be required to pay the remaining balance of taxes owing plus applicable interest, and will be required to write-off any remaining tax assets relating to reassessed amounts.
The said public company also informed in 2018 that it has been further notified by the Canada Revenue Agency ("CRA") and provincial tax authorities of tax notices of reassessments and assessments relating to the taxation years 2008 to 2017, denying the application of non-capital losses, scientific research and experimental development ("SR&ED") pool deductions and SR&ED tax credits claims. As a result additional taxes payable including interest and penalties are assessed at approximately $60.9 million.
IT MUST BE NOTED that the affiliate ceased to be a public company in 2021 pursuant to a Plan of Arrangement between the parent-company and the affiliate completed during that same year. In brief, the parent-company purchased the remaining shares it did not owned of its affiliate.
I am totally puzzled as to how on earth is it possible for the given case filed under Appeal in 2014 has not 9 years down the road, therefore so far in 2023, proceeded long ago to a formal hearing before a judge?
There is a definite, unacceptable laxity, stalling this file/matter (Status : Case management in progress) to proceed in an orderly time fashion.
Lawyers for the "Appellant" (a public company which shares are trading at roughly $0.30) are nonetheless being paid juicy legal fees, which money comes out of the company's treasury to no avail.
When the Canada Revenue Agency ("CRA") notified the parent-company in 2014, it has obviously done so based on laws/provisions of the Income Tax Act.
It should then be clear as to on what grounds is the Affiliate being denied the said "tax notices or reassessment" and not give way to an excessive period of time in terms of years before a court hearing is properly scheduled.
If you could please, Mr. Justice Rossiter, have a Court staff shedding light with me on this matter, hopefully by an e-mail reply.
Yours sincerely,