• PUBLICATIONS & PRESENTATIONS
ARTICLES, PAPERS & SPEECHES

ARTICLES
Philip Friedlan and Adam Friedlan, “Breese Syndics Inc.: De Jure Versus De Facto Control”, (2021) vol. 21, no. 4 Tax for the Owner-Manager, Canadian Tax Foundation
The recent case of Bresse Syndics Inc. v. Canada(2021 FCA115) dealt with the issue of whether CO 2 Solutions Technologies Inc. was a CCPC in its 2009 taxation year. The case was decided prior to the 2017 amendment of the Act, which added subsection 256(5.11). This provision expanded the circumstances that can be considered in determining whether de facto control exists.  Although this decision sheds little light on how the recently amended de facto control test in subsection 256(5.11) of the ITA will apply in future, this decision does act as welcome reminder of the complexities of applying the  de jure  control test as well as determining de facto control.
Philip Friedlan and Adam Friedlan, “DiCaita v. The Queen, When are Repairs and Maintenance Expenses Currently Deductible”, (2021) vol. 21, no. 3 Tax for the Owner-Manager, Canadian Tax Foundation
This article examines the recent case of  DiCaita v. The Queen, 2021 TCC 5, an informal procedure case (and thus of no precedential value but nonetheless a helpful reminder of the law) which illustrates the law regarding two fundamental issues that arise under the Act—namely, whether a taxpayer has a source
of income and whether an expense is on income or capital account.
Philip Friedlan and Adam Friedlan, “Valuing Inventory: Legal Analysis Overrules GAAP”, (2021) vol. 21, no. 2 Tax for the Owner-Manager, Canadian Tax Foundation
This article examines the recent case of  Yorkwest Plumbing Supply Inc. v. The Queen, 2020 TCC 122, which addressed the narrow technical question of whether the Act permits a taxpayer to write down and/or deduct the value of inventory in a taxation year after the goods are sold but also raised an interesting question being: how should our tax system address situations in which there is a clear tension between an equitable outcome and a technically correct outcome.
Philip Friedlan and Adam Friedlan, “Callaghan v. The Queen: Distinguishing a Source of Income from a Hobby”, (2021) vol. 21, no. 1 Tax for the Owner-Manager, Canadian Tax Foundation
This article examines the recent case of  Callaghan v. The Queen, 2020 TCC 28, which was concerned primarily with the question whether the activities of the appellants (Michael Callaghan and his spouse, Barbara Van Rassel) were a source of income—namely, a business.
Philip Friedlan and Adam Friedlan, “Section 160 and Transfers Between Spouses: Distinguishing Moral from Legal Obligations”, (2020) vol. 20, no. 4 Tax for the Owner-Manager, Canadian Tax Foundation
This article examines the recent case of  Brown v. The Queen, 2020 TCC 45, in which the TCC considered whether transfers made by Mr.  Levoy to his spouse, Ms.  Brown, were given for valid consideration or were made merely in respect of non-enforceable moral obligations, and consequently whether such transfers attracted the application of section 160 .
Philip Friedlan and Adam Friedlan, “Colitto Reversed: Section 160 Applies to a Director’s Liability in or in Respect of the Year that the Failure Occurs”, (2020) vol. 20, no. 3 Tax for the Owner-Manager, Canadian Tax Foundation
This article examines the recent case of  Canada v. Colitto, 2020 FCA 70 in which the FCA overturned the decision of the TCC reversing the taxpayer’s victory at Tax Court. The decision deals with the interaction of subsection 160(1) and subsections 227.1(1) and (2). In the note the reasoning of the FCA which employs a purposive analysis to arrive at the meaning of subsections 227.1(1) and (2) is analyzed and consideration is given as to whether a more appropriate interpretive method would be to employ a textual analysis.
Philip Friedlan and Adam Friedlan, “Muir: Applying Section 160 When the Minister’s Collection Powers Have Not Been Stymied”, (2020) vol. 20, no. 2 Tax for the Owner-Manager, Canadian Tax Foundation
This article examines the recent case of Muir v The Queen, 2020 TCC 8 an informal procedure decision which while having no precedential value, does provide some interesting comments regarding section 160 and its application. In particular obiter comments by Justice Boyle stating that it was not the intention of Parliament or the Federal Court of Appeal in Livingston  to have  section 160 apply in circumstances where the Minister wasn’t  in any different position whatsoever as a result of the  impugned transfer, may be of interest.
Adam Friedlan, “A Question of Deductibility: Professinal Fees and Litigation Dealing with Both Income and Capital Items”, March 5, 2020, CCH Tax Topics 2504.
This article discusses the recent case of Richards v The Queen, 2020 DTC 1005 (TCC), which provides a helpful review of issues relating to the deductibility of professional fees incurred in respect of litigation involving both income and capital related purposes.
Philip Friedlan and Adam Friedlan, “Eyeball Networks Inc.: The Interaction Between Section 160 and a Related-Party Butterfly Transaction “, (2020) vol. 20, no. 1 Tax for the Owner-Manager, Canadian Tax Foundation
This article examines the recent case of Eyeball Networks Inc v The Queen, 2019 TCC 150 which addresses the application of section 160 to a so-called “related-party butterfly transaction”
Philip Friedlan and Adam Friedlan, “A Question of Timing: Section 160 and a Director’s Liability Under Section 227.1”, (2019) vol. 19, no. 4 Tax for the Owner-Manager, Canadian Tax Foundation
This article examines the recent case of Colitto v The Queen, 2019 TCC 88. The case clarifies the when an assessment for director’s liability under section 227.1 crystallizes such that it can give rise to a derivative assessment under section 160.
Philip Friedlan and Adam Friedlan, “Jencal Holdings: The Application of Subsection 256(2.1)”, (2019) vol. 19, no. 3 Tax for the Owner-Manager, Canadian Tax Foundation
This article reviews the recent decision of Jencal Holdings Ltd. v The Queen, 2019 TCC 16 which concerned the application of subsection 256(2.1), an anti-avoidance provision that deems two or more corporations to be associated if it may reasonably be considered that one of the main reasons for the separate existence of the corporations is to reduce the amount of taxes that would otherwise be payable under the Income Tax Act (Canada).
Philip Friedlan and Adam Friedlan, “Uncertainty Resolved: Milne Estate Reversed”, (2019) vol. 19, no. 2 Tax for the Owner-Manager, Canadian Tax Foundation
This article reviews the recent decision of the Divisional Court in Milne Estate (Re), (2019 ONSC 579) which reversed the decision of the Superior Court (2018 ONSC 4174), which had refused to grant probate to wills containing a certain kind of allocation clause used in Ontario as part of planning designed to mitigate exposure to the Estate Administration Tax Act, 1998 (Ontario).
Philip Friedlan and Adam Friedlan, “Paragraph 12(1)(x) and the Taxation of Incentive and Inducement Payments”, (2018) vol. 18, no. 4 Tax for the Owner-Manager, Canadian Tax Foundation
This article discusses the recent case of Ritchie v The Queen (2018 TCC 113), which was concerned the with tax treatment of certain signing bonuses reported on the appellant’s personal tax return and provides a review of the jurisprudence on the taxation of incentive and inducement payments.
Philip Friedlan and Adam Friedlan, “De Facto Control at the FCA: The End of the McGillivray Saga”, (2018) vol. 18, no. 3 Tax for the Owner Manager, Canadian Tax Foundation
This article discusses the recent case of Aeronautic Development Corporation v Canada (2018 FCA 67), in which the FCA dismissed the taxpayer’s appeal of the TCC’s decision (2017 TCC 39) in which it found de facto control under subsection 256(5.1) after the decision in McGillivray Restaurant Ltd. v Canada (2016 FCA 99). This case represented the final decision interpreting the meaning of subsection 256(5.1) prior to the introduction of subsection 256(5.11).
Philip Friedlan and Adam Friedlan, “CRA Audit of “Other Employment Expenses”: the Adler Case”, (2018) vol. 18, no. 2 Tax for the Owner Manager, Canadian Tax Foundation
This article highlights a CRA audit project targeting “other employment expenses” claimed on line 229 of the T1 tax returns of employee-shareholders, which although subsequently withdrawn, was based on a dubious interpretation of Adler v The Queen (2009 TCC 613).
Philip Friedlan and Adam Friedlan, “Professional Negligence: The Discoverability of Liability in Tax Cases”, (2018) vol. 18, no. 1 Tax for the Owner Manager, Canadian Tax Foundation
This case comment reviews the case of Presidential MSH Corporation v Marr Foster & Co. LLP (2017 ONCA 325) in which the issue in dispute was whether the claim of negligence made by MSH against its accountant and his firm was statute barred. This case is of interest to tax practitioners in Ontario who deal with situations in which ameliorative efforts may mitigate or eliminate a possible claim in negligence.
Philip Friedlan and Adam Friedlan, “Evoy Estate: The Meaning of Subsection 104(2) Clarified”, (2017) vol. 17, no. 2 Tax for the Owner Manager, Canadian Tax Foundation
This article discusses the recent case of Evoy Estate where the issue in dispute was whether the Minister of National Revenue had properly treated the Appellant (being one of three testamentary trusts created in the will of the late George Kenneth Evoy (“George”)) along with two other trusts created pursuant to that will as one individual pursuant to subsection 104(2) of the Income Tax Act (Canada).
Adam Friedlan, “The BC Trust Case: Rectification in the Post-Fairmont World”, March 16, 2017, CCH Tax Topics 2349.
This article discusses the recent case of BC Trust v Canada (Attorney General), 2017 BCSC 209, which concerned an application by BC Trust seeking a declaration giving retroactive effect to a trust minute to be dated December 31, 2012 allocating the income of BC Trust to its income beneficiary the Alta Trust in respect of its 2012 taxation year. BC Trust was the first application of the doctrine of rectification in a tax context after the decision of the Supreme Court of Canada in Canada (Attorney General) v Fairmont Hotels, 2016 SCC 56.
Philip Friedlan and Adam Friedlan, “When Is a Director’s Resignation Legally Effective”, (2017) vol. 17, no. 1 Tax for the Owner Manager, Canadian Tax Foundation
This article discusses the recent case of Her Majesty the Queen v Sally Anne Chriss and Her Majesty the Queen v Donna Elizabeth Gariepy, 2016 FCA 236, in which the main issue was whether the Tax Court of Canada had had erred in finding that certain persons had resigned as directors of 1056922 Ontario Ltd. and were therefore not personally liable for the corporation’s unremitted tax withholdings. This case highlights the requirements necessary for a director’s resignation to be legally effective.
Philip Friedlan and Adam Friedlan, “Kruger Incorporated v Canada: What To Make of the Realization Principle”, (2016) vol. 16, no. 4 Tax for the Owner Manager, Canadian Tax Foundation
This case comment reviews the recent case Kruger Incorporated v Her Majesty the Queen, 2016 FCA 186, which was an appeal of the decision of Rip J. in 2015 TCC 119 stemming from a reassessment of Kruger Incorporated’s (Kruger) 1998 taxation year by the Minister of National Revenue on the basis that the realization principle applied to determine income and loss pursuant to section 9 of the Income Tax Act (Canada) of Krueger’s dealings in foreign exchange options entered into one year and but exercised in the following year. Kruger had employed the mark to market accounting method in computing its income from such options. The FCA found that there was no authority for the Tax Court’s proposition that the Realization Principle applies to the exclusion of the mark to market method unless the Income Tax Act(Canada) provides otherwise. Therefore, the FCA held that mark to market method could not be excluded as an acceptable method for computing income pursuant to section 9. Certain amendments to the tax law were introduced in the 2016 Federal Budget possibly in response to the holding in this case.
Philip Friedlan and Adam Friedlan, “When Does the Operation of a Rental Property Become a Business”, (2016) vol. 16, no. 2 Tax for the Owner Manager , Canadian Tax Foundation
This article discusses the recent case of McInnes v The Queen, 2014 TCC 247 (Informal Procedure), where the issue in dispute was whether certain income earned by the Appellant from a cottage was business income or rental property income, and consequently whether losses incurred from earning such income was subject to the restriction contained in the Income Tax Regulations, C.R.C., c. 945, which prevents capital cost allowance on a rental property from creating or increasing a rental loss.
Philip Friedlan and Adam Friedlan, “Ponzi Schemes and Bad or Doubtful Debts”, (2015) vol. 15, no. 4 Tax for the Owner Manager, Canadian Tax Foundation
This article discusses the case of Delle Donne v The Queen (2015 TCC 150), in which the issue in dispute was whether $137,500 of interest was properly included in the appellant’s income and was deductible by virtue of subparagraph 20(1)(l)(i) or 20(1)(p)(i).
PAPERS
Philip Friedlan and Adam Friedlan, “256(5.1)—De Facto Control: A Return to the Past,” in 2017 Ontario Tax Conference (Toronto: Canadian Tax Foundation, 2017) 5: 1-18.
The 2017 Federal Budget and recent cases have affected the meaning of de facto control under the Income Tax Act (Canada). The concept of de facto control under subsection 256(5.1) of the Income Tax Act (Canada) continues to be important as it relates to various aspects of the Act such as CCPC status. This paper explored the current meaning of de facto control and its implications for tax planning.
Carol A. Fitzsimmons, Philip Friedlan and Adam Friedlan, “Selected Issues for Canadians Holding and Disposing of U.S. Vacation Property” 2015 Ontario Tax Conference (Toronto: Canadian Tax Foundation, 2015)
This paper, presented at the 2015 Ontario Tax Conference by Phil Friedlan and Carol Fitzsimmons of Hodgson Russ LLP surveys a series of issues a selection to Canadians holding and disposing of U.S. vacation property through the lens of several practical case studies.
Philip Friedlan and Adam Friedlan, “Principal and Cottage Residence Planning: A Review of Selected Issues – Part I,” 2013 Ontario Tax Conference (Toronto: Canadian Tax Foundation, 2013), 8A: 1-23
This paper, presented at the 2013 Ontario Tax Conference, surveys a series of issues related to tax planning pertaining to principal and cottage residences. These issues included the use of an inter vivos trust to hold a cottage residence and the treatment of excess-land as it relates to claiming the principal residence exemption. The paper also offers a review of the ownership requirement contained in the definition of principal residence pursuant to section 54 of the Income Tax Act (Canada) as it applies to condominium units during the occupancy-period.
Philip Friedlan, “Tax Deferral: Old and New,” in 2008 Ontario Tax Conference (Toronto: Canadian Tax Foundation, 2008), 5:1-40
This paper provided a review of the then existing non-employer provided tax-advantaged saving plans and exempt life insurance and a detailed review of the RDSP and the TFSA and offered a discussion some of the benefits and the disadvantages of the later plans as compared to the former plans.