Don't lift my Corporate Veil baby.

In a shameless decision that only served to illustrate that the Tax Court of Canada is indeed a Kangaroo court, for the second time the court ruled in it's own favour in my appeal of the application of the foreign tax credit.
http://decision.tcc-cci.gc.ca/en/2001/2001tcc20005196/2001tcc20005196.html

In a very unusual situation, the Crown actually opened the appeal admitting it had made a mistake in applying the tax law to my situation but without blinking an eye, the Crown turned around and introduced yet another argument that they thought would continue to rob me of my hard earned and legitimate wages.

Even more difficult to imagine, the judge ALLOWED the Crown to introduce AND PERSUE this second line of attack. In the end the Tax court again ruled in it's own favour. Dirty pool the likes that few people would believe. After all, why would you expect the Tax court to rule in your favour anyway?

The result was that I had to file my last appeal with the Federal Appeal Court of Canada. In a pivitol decision, the court slapped the hands of the Tax department for their ferocious handling of the case and rendered a decision including damages on my behalf.
http://decisions.fca-caf.gc.ca/en/2002/2002fca258/2002fca258.html

And what was the issue that swung the decision in my favour? Revenue Canada lifted the corporate veil. The judge explained quite clearly what this legal concept was all about in the decision above but for you and me, what we need to know when Revenue Canada comes knocking, is that if we say that's the way we run our company and there's no evidence of a "sham", then the tax man is obliged to accept our explanation and work with it. They can't gather evidence without having a specific suspicion and they certainly can not use evidence gathered against you to tell you that you run your company any other way that you explained it.

So there's two important concepts in there and one BIG caveat.

If there's no evidence of a "sham":
1) They can't gather evidence without a reason why. That means NO FISHING EXPEDITIONS.
2) They can't tell you the way you run your company. It YOUR company and you tell THEM the way it works and they must accept that and work with it.