Ian Ford and Norma Ford appealed a Tax Court of Canada 2014 decision relating to taxation years going back to around 1999 -2001.    The decision notes that “Ian Ford and Norma Ford participated in an art donation program operated by Canadian Art Advisory Services. They purchased pieces of art for a particular price and then donated the art to a charity. For each donation they received a receipt for an amount that exceeded the amount that they paid for the art.” Needless to say CRA did not accept the valuation and donation receipts.   CRA assessed the Fords in 2002 and then reassessed them in 2012.  The Fords argued that it was unfair that the reassessment happened so many years after the transaction.  The FCA did not agree.  The interesting part was that the legal arguments the Fords were making would have actually increased their taxes!    

The case deals with procedural fairness when a number of different cases are lumped together and also the issue of timing of CRA reassessments.

The court noted:

[28]                There are many cases where fair market value of a particular property will be an issue to be determined in a hearing before the Tax Court of Canada. Since an appeal to the Tax Court of Canada is always in relation to the assessment or reassessment of a prior taxation year, such valuation issues will always relate to an earlier date than the date of the hearing. If taxpayers are concerned that the Minister is not reconsidering their assessment with all due dispatch, as required by subsection 165(3) of the Act, and that the passage of time will have a negative impact on their ability to muster evidence for a hearing before the Tax Court of Canada, then they could avail themselves of the right to appeal to the Tax Court of Canada, as provided in paragraph 169(1)(b) of the Act.

[29]                In this case, Ian Ford and Norma Ford would also have known in 2002 when Ian Ford was reassessed, that the Canada Revenue Agency did not agree with the valuation of the art that was used in filing Ian Ford’s 1999 income tax return. They filed their notices of objection in 2002 and 2003 and therefore have had several years to collect their evidence in relation to the fair market value of the donated art. Norma Ford’s statement that the evidence on valuation was thin and difficult to obtain does not assist her case as this would mean that she would have little or no evidence to present to the Tax Court in support of their position that the fair market value of the donated art was the amount that was claimed as the charitable donation in their tax returns.

 Here is a link to the case:  http://decisions.fca-caf.gc.ca/fca-caf/decisions/en/item/98413/index.do