2018: GAAR in Review at the Federal Court of Appeal (FCA)
By Amit Ummat
In 2018, the Federal Court of Appeal (“FCA”) decided eight general anti-avoidance rule (“GAAR”) decisions. I plan to survey briefly those decisions to extract any discernible patterns from the ways in which those decisions were reasoned. There are three conditions to be met for the application of the GAAR, namely: a) the existence of a tax benefit; b) an avoidance transaction; and c) a misuse or abuse of the legislation. The final stage of the GAAR analysis involves a two-step process, namely: a) determining the object, spirit and purpose of the provisions relied on to obtain the tax benefit; and b) determining whether this rationale has been frustrated by the achieved tax benefit.
Gervais c. Canada, 2018 FCA 3 (F.C.A.) (“Gervais”)
Gervais is one of five decisions discussed in this article to be written by Justice Noel. This appeal by the taxpayer was dismissed by the FCA with costs to the Respondent. The issue was uncomplicated. The Tax Court had found that the GAAR applied to reassessments which reconfigured the tax consequences arising from a sale of shares by attributing to the Appellant a capital gain of $500,000, which had been realized by his spouse.
The Appellant was in the process of selling his corporation to an arm’s-length purchaser and sought legal advice to find a way to transfer some of the proceeds to his spouse for income tax purposes. A series of transactions took place between the Appellant and his spouse, including a sale of shares to her, waiving the rollover provisions, a subsequent gift of shares to her with the rollover provisions applying in this instance, and an arm’s-length sale by the Appellant’s spouse to the purchaser. The result was that the part of the capital gain that the Appellant would have realized if he had sold the shares without first transferring them to his spouse was realized by her, thus giving her the opportunity to claim her $250,000 lifetime taxable capital gains exemption pursuant to subsection 110.6(2.1) of the Income Tax Act (the “Act”).
In assessing the Appellant under the GAAR, the Minister reconfigured the tax consequences arising from these transactions by attributing to him the taxable capital gain of $250,000 realized by his spouse on the sale of shares. The Tax Court of Canada (the “TCC”) found that there was a benefit, namely, the avoidance of tax on a part of the gain arising from the sale of shares. The Court found a series of avoidance transactions was established because one of the transactions — the sale of shares to his spouse — did not have a bona fide non-tax purpose. Abuse was established by the TCC Judge because the purpose of subsection 74.2(1), namely, attribution to the spouse, was defeated. The capital gain that should have been the Appellant’s was split in half and shared with his spouse, a result which that provision was intended to prevent.
At the FCA, the Appellant argued that there was no benefit, no avoidance transaction and no abuse. Justice Noel found the TCC was correct in concluding that there was abuse. More specifically, he held that the splitting of the capital gain that had accrued on the shares while they were held by Mr. Gervais prior to the implementation of the series and the fact that he was eventually taxed on only part of this gain frustrated the object, spirit and purpose of subsections 73(1) and 74.2(1). But for GAAR, the entire gain should have been attributed to the Appellant but because of the clever use of subsection 47(1), it was not.
This is a case where the taxpayer was unsuccessful in the TCC and the FCA. The Appellant valiantly argued that the purpose of the transaction was to reward his wife, but the Court found that the transactions at issue did not support this view.
Canada v. Oxford Properties Group Inc., 2018 FCA 30 (F.C.A.) (“Oxford”)
Oxford is another decision by Justice Noel, allowing the Crown’s appeal in part of a TCC decision which had ruled in favour of Oxford. The TCC judge held that the series of transactions undertaken by Oxford did not amount to abusive tax avoidance. The series involved rolling three real estate properties through a tiered partnership structure, increasing the adjusted cost base of the partnership interests and selling these interests to tax-exempt entities, thereby avoiding tax on CCA recapture and accrued gains on the property held by the partnerships.
The facts are quite complex. The shares of the Respondent’s predecessor were being acquired in a sale transaction. As part of this transaction, the subject corporation was to dispose of several real estate properties. These properties had high fair market value (“FMV”) and low adjusted cost base (“ACB”). The three properties were rolled into one of two partnerships. The partnerships had high fair market values, but the interest held by each partner had a low ACB. A series of amalgamations then occurred, eventually leading to Oxford’s holding the interests in the partnerships that owned the properties. Oxford was able to bump the ACB of the partnership interests, which would then have had high ACB and high FMV, but the properties themselves retained low ACB.
A second-tier partnership was then created, and the properties were rolled into that partnership. When the first partnership was dissolved, Oxford acquired interests in the second partnership. As well:
…an election was made pursuant to subsection 98(3). This allowed Oxford to avail itself of a second bump and increase the ACB of the partnership interests it held in the second-tier partnerships. As a result, the partnership interests held by Oxford in the second-tier partnerships had high FMVs and ACBs while the real estate properties retained their low ACB and undepreciated capital cost (“UCC”). This was the situation when, between September 2005 and July 2006, Oxford disposed of its partnership interests in the second-tier partnerships to the tax-exempt entities.
What ultimately occurred was a bump of the tax cost of the partnership interests to their FMV , and the subsequent circumvention of subsection 100(1) by eliminating the capital gain which would otherwise have resulted from the sale of the partnership interests to the exempt entities.
Given the high ACB of the partnership interests sold by Oxford, little or no taxable capital gain was generated by the sale and, in one case, there was a capital loss. Thus, even though the sale was made to tax-exempt entities, subsection 100(1) had no application. As a result, tax on the recapture and accrued gains inherent in the underlying real estate properties, which had been deferred by reason of the rollovers, was avoided altogether. The Minister reassessed using the GAAR, on the basis that the rollovers and bumps were used to increase the ACB of the partnership interests in the first and second tier partnerships in a manner which allowed Oxford to circumvent the application of subsection 100(1).
On appeal to the FCA, the Crown argued that Oxford abused subsection 97(2), paragraph 88(1)(d) and subsection 98(3) in order to avoid recapture that would normally arise pursuant to subsection 100(1). Furthermore, 97(2) only allows for the deferral of gains, not their complete avoidance.
Oxford conceded that the deferred tax on the accrued gains, the bumps in the first- and second-tier partnerships, and the reduction of tax payable on the sale of the partnership interests to the exempt entities all gave rise to a tax benefit. It did not take issue with the TCC’s finding that there was at least one avoidance transaction. Thus, the only question left for the FCA to decide was whether there was an abuse of these provisions. The question was whether the elimination of the capital gain on the sale of the partnership interests to the exempt entities by the use of the bumps and the consequential avoidance of recapture frustrate subsection 100(1).
The FCA held that it did. The TCC was found to have erred, mainly on the basis that it failed to ask the question whether the fact that deferred gains and recapture would never be taxed frustrated the object, spirit and purpose of subsection 97(2). The answer is yes, the Court held, since if “…the only reason why Parliament would preserve the tax attributes of property that is rolled into a partnership is to allow for the eventual taxation of the deferred gains and latent recapture, the answer must be in the affirmative.” The TCC judge was also found to have misinterpreted the bump rules, since the bump rules were used to increase the UCC of depreciable property, which is not permitted. The FCA allowed the Crown’s appeal and confirmed the application of the GAAR. Oxford’s leave application was refused by the Supreme Court.
Fiducie financière Satoma c. Canada, 2018 FCA 74 (F.C.A.) (“Satoma”)
Satoma is an appeal by a taxpayer of a TCC decision confirming the application of the GAAR. The TCC found that the series of transactions which allowed taxable dividends received by the Satoma Trust to be transformed into tax-paid amounts without any tax actually being paid on them resulted in an abuse of subsections 75(2) and 112(1) of the Act.
Satoma appealed to the FCA on the basis that the TCC judge’s conclusion that it received a tax benefit was premature because no such benefit could arise until it made a distribution to its individual beneficiaries. As such, in Satoma’s view, this issue was hypothetical at the time they were reviewed by the TCC.
The facts are somewhat similar to those in Pomerleau (discussed below), since a corporation owner wished to extract surplus from that corporation to finance other business operations. Specifically, in this case the shareholder embarked on a tax plan to extract surplus from his corporation to finance his involvement in the manufacture of generic pharmaceuticals. The plan at issue first involved the settling of a trust with a right of reversion. The plan contemplated that the attribution rule would apply at various stages. Where property contributed to a trust can revert to the taxpayer, any income derived from the property or property substituted therefor would also be attributed to that taxpayer
In this case, the corporation designated as a beneficiary under the Satoma Trust made a $100 contribution to the trust by way of a donation with the result that the donated property could revert to it. Subsection 75(2) therefore became applicable.
The Satoma Trust subsequently used the donated amount to purchase shares in a different corporation, with the result that these shares became substituted property. As the shares revert to the settlor, any income derived therefrom would be attributable too. Once this was established, a series of transactions took place, including a declared dividend, a subsection 112(1) deduction, surplus contributions from one company to another, and the application of the attribution rules which allowed the Trust to avoid tax on the dividend. This structure allowed the Satoma Trust to receive and retain more than $6 million of taxable dividends on which no tax was paid. Importantly, no amounts had been distributed to the Trust’s beneficiaries.
The Minister reassessed to tax the dividends. The TCC confirmed this assessment, finding that the conditions for the GAAR to apply were present. In particular, the TCC concluded that subsections 75(2) and 112(1) were frustrated in this case because the use of those provisions allowed for the surplus of one corporation to find its way into the hands of the Satoma Trust without tax liability ever being incurred by it or its beneficiaries. In the Court’s view, this went against the object, spirit and purpose of both provisions.
On appeal to the FCA, the Appellant’s main argument was that there was no benefit. It relied on OSFC Holdings Ltd. v. R. for the proposition that a tax benefit must materialize if it is to be recognized as such. It further argued that it was premature to find abuse before any distributions to the beneficiaries are made.
Justice Noel found that a tax benefit was obtained by the Appellant when the attribution rule in subsection 75(2) became operational. It allowed the Trust to avoid paying tax on the taxable dividends which it received in circumstances where no portion if the dividends was distributed to the beneficiaries. As the Court found, “the suggestion that no tax benefit can be said to arise before a tax-free distribution is made to the individual beneficiaries ignores the fact that the reassessments are directed at the Satoma Trust, which as noted is deemed under the Act to be an individual liable for tax on all taxable amounts received.”
With respect to the Appellant’s argument that there was no abuse since no distribution was made, the FCA found the combined use of subsections 75(2) and 112(1) gave rise to an abuse. This abuse arose when the optional deduction provided for under subsection 112(1) was claimed. Subsection 75(2) and its combined use with subsection 112(1) was found to offend the object, spirit and purpose of subsection 112(1) because the dividends could then be passed on to the beneficiaries without tax.
The Appellant also argued it could have achieved the same result using different methods. That was found not to be the case and that argument was summarily dismissed.
The FCA ultimately agreed with the TCC decision and found that no errors had been made by the Court in finding that there was in fact a benefit and an abuse, even though no distribution had been made to the Trust beneficiaries.
1245989 Alberta Ltd. v. Canada (Attorney General), 2018 FCA 114 (F.C.A.) (“1245989 Alberta”)
The Appellant taxpayer was successful in having the TCC’s decision based on the application of GAAR set aside. This is the only case in which the taxpayer had such a decision overturned in 2018 on appeal to the FCA. The FCA found that the TCC erred in finding that section 84.1 (provision against surplus strips) was abused.
In this case, the litigation arose as a result of the Minister’s applying the GAAR and issuing a notice of determination to reduce the paid-up capital of Mr. Wild’s shares in a subject corporation from $595,264 to $110.
Mr. Wild effected a corporate reorganization which resulted in an increase of ACB to a particular class of shares held by Mr. Wild. The Minister ground down the paid-up capital (“PUC”) via notice of determination. The Appellant appealed. The TCC reviewed the allegedly abused provisions, namely, section 84.1 and subsection 89(1). Subsection 89(1) provides guidance on PUC calculation on a per share basis. Section 84.1 acts to ensure that the PUC of the shares of the corporation to which the shares are transferred does not exceed the PUC of the transferred shares. Section 84.1 basically grinds the PUC of the newly acquired shares down to the greater of the PUC and the shareholder’s ACB of the transferred shares.
What then was the abuse? The TCC found that the series of avoidance transactions entered into by Mr. Wild and his corporations abused section 84.1 by allowing him to indirectly withdraw one corporation’s earnings tax-free by using his capital gains exemption to offset the capital gain realized on a sale to a non-arm’s length party in a share-for-share exchange, and that this was achieved by triggering the PUC averaging mechanism in section 89 when two corporations issued the same class of shares to two separate parties. The PUC averaging inflated the PUC of Mr. Wild’s shares with no new capital contribution.
The FCA found no abuse:
 Without doubt, the transactions increased the PUC of the Class E preferred shares of 1245 held by Mr. Wild. However, there was no evidence before the Tax Court that there had been any distribution of 1245’s retained earnings (referred to as corporate surplus by the Tax Court). Indeed, during oral argument of their appeal counsel for the appellants confirmed both that PWR had not distributed its retained earnings to 1245 and that the corporate reorganization could be unwound.
 Thus, while the corporate reorganization changed the tax attribute of the Class E preferred shares, creating the potential for a tax-free distribution of 1245’s retained earnings, that potential has, to date, not been realized.
These comments by Justice Dawson do not jibe with those made by Justice Noel in Satoma, where abuse was found despite the fact that no distributions were made to the trust beneficiaries.
The FCA found the transactions that resulted in the increased PUC of the Class E preferred shares of 1245989 Alberta did not result in a tax benefit. And therefore, it could not be said that section 84.1 had been abused. The appeal was therefore allowed with costs to the Appellant.
Pomerleau c. Canada, 2018 FCA 129 (F.C.A.) (“Pomerleau”)
In this GAAR decision, once again penned by Justice Noel, the Appellant had effected a sophisticated tax plan to finance a new construction. The Appellant sought to extract surplus from an existing corporation to finance the construction of a chalet. The plan included family members (who were also shareholders of related corporations), gifting shares to the Appellant, the Appellant’s rolling shares into a related corporation with a sibling, and a share transfer to the Appellant which triggered the application of paragraphs 69(1)(b) and (c). The result was an increase in the ACB of a class of shares eventually held by the Appellant from $0 to almost $ million. A subsequent share transfer via rollover to a holding company, followed by a redemption of the shares received in the rollover, ultimately resulted in a tax-free return of capital to the Appellant. The Minister considered that his return of capital should have been caught by section 84.1 but was not in fact.
This provision provides, among other things, that where a taxpayer transfers shares of one corporation to another corporation with which it does not deal at arm’s length and receives shares as consideration (respectively the “subject shares” and the “new shares”, undersection 84.1), the paid-up capital of the new shares will be equal to the greater of the paid-up capital of the subject shares or their ACB. For the purposes of this calculation, the ACB of the subject shares must be reduced when it comprises amounts in respect of which the taxpayer or a person related to the taxpayer has previously claimed a capital gains deduction. In the present case, this reduction (See paragraph 84.1(2)(a.1)) had no effect by reason of the combined application of paragraphs 40(3.6)(a), 40(3.6)(b) and 53(1)(f.2) triggered by the tax plan put in place by the appellant.
Because a portion of the return of capital was an amount upon which the Appellant had claimed, the Minister reassessed to deny the benefit.
In the TCC, like many taxpayers, in GAAR, the Appellant to conceded that there was both a tax benefit and an avoidance transaction. The only issue left for the Court was to decide whether there has been an abuse of the statute to obtain the benefit in question.
The TCC found that it was the combined effect of paragraphs 40(3.6)(a), (b) and 53(1)(f.2) that caused the shares in question to escape the application of subparagraph 84.1(2)(a.1)(ii). These provisions would have reduced the ACB by the amounts upon which a capital gains deduction had been claimed. The Court identified the policy against surplus strips and the reasons why sections 84.1 and 212.1 exist. On that basis, the Court found there had been an abuse, since approximately half of the return of capital should have been reduced by virtue of the circumvented provisions but for GAAR.
The object, spirit and purpose of section 84.1 is to prevent amounts that have not been taxed from being used to remove corporate surplus on a tax-free basis. The FCA found that this rationale was frustrated by the plan implemented by the Appellant. Almost half of the returned capital represented amounts in respect of which no tax had been paid. Therefore, the FCA concluded that the TCC was correct in holding that the withdrawal of the amount from the surpluses of the holding company without tax being paid frustrated the object, spirit and purpose of section 84.1 and, more specifically, subparagraph 84.1(2)(a.1)(ii). The appeal was dismissed with costs to the Respondent.
Quinco Financial Inc. v. Canada, 2018 FCA 137 (F.C.A.) (“Quinco”)
The reasons for judgment in this case, written by Justice Webb, raise an interesting legal issue quite different from those that arise in most GAAR cases. Quinco was created via amalgamation with certain predecessor corporations. Two of those corporations filed returns prior to the amalgamation, reporting capital gains and large capital losses. The Minister reassessed to disallow the capital losses in full on the basis that the underlying transactions resulting in those capital losses were precluded by the GAAR. Arrears interest was calculated on the basis that it arose at the time liability arose, and not when the GAAR reassessment was raised.
A Rule 58 motion was brought in the TCC to determine the question whether interest accrues at the time of liability or the time of assessment. The TCC held that interest begins at the time of liability. Quinco appealed, contending that interest arising as a result of a reassessment based on GAAR does not begin to accrue until after the balance-due date for the year in which the reassessment relates.
What was interesting in this case was that the TCC had suggested that this entire issue could have been avoided had the predecessor corporations simply applied the capital losses on filing. The FCA agreed, and went on further to say: “If a taxpayer completes a transaction or series of transactions that results in a tax benefit and the taxpayer files a tax return on the basis that such tax benefit is available to the taxpayer, then that taxpayer is accepting the risk that the Minister may disagree and apply GAAR.”
Interest liability is contained in section 161 of the Act, which states that, where at any time after a taxpayer’s balance-due day for a taxation year, that taxpayer is liable to pay interest, then the taxpayer shall pay interest at the prescribed rate on the excess, computed for the period during which that excess is outstanding. Quinco focused on “the period during which that excess is outstanding”. It argued that this excess is only outstanding from the date that the GAAR reassessment is issued and not from the balance-due date for the taxation year for which the reassessment is issued.
The FCA found that since section 157 requires that taxes are payable on the balance due-date, and since the predecessor corporations were reassessed to deny capital losses on a particular date, and taxes were due on that date, interest began accruing on that date, and not on the later date when the reassessment was made..
The FCA also relied on R. v. Simard-Beaudry Inc.,  F.C. 396, 71 D.T.C. 5511 (Fed. T.D.) at 403 [F.C.] / 5515 [D.T.C.], in which it was held that “the assessment does not create the debt but is at most a confirmation of its existence”. This applied to a GAAR reassessment, since it establishes the tax debt that is owing for a particular taxation year.
This decision shows that when taxpayers engage in transactions that are subject to GAAR, they assume the risk not only of having to pay more tax than reported, but also of having to pay arrears interest on the additional amount from the time of the taxation year in which the transaction took place rather than the time of the GAAR reassessment
Canada v. 594710 British Columbia Ltd., 2018 FCA 166 (F.C.A.) (“594710 BC Ltd.”)
In 594710 BC Ltd., Justice Woods allowed the Crown’s appeal of a TCC decision which had vacated 594710 BC Ltd.’s assessment on the basis that GAAR did not apply. The relatively complicated facts deal with the trading of tax attributes. One partnership used another with captive losses to avoid tax on its income.
The issue under appeal revolved around the question whether section 160 of the Act—a collection provision—had been frustrated. 594710 BC Ltd. was assessed under the GAAR as a non-arm’s length transferee which was jointly and severally liable for a tax liability owed by a former subsidiary, 671705 British Columbia Ltd. (“671705 BC Ltd.”). 594710 BC Ltd. appealed the section 160 assessment to the TCC on several grounds, one of which was to deny that 671705 BC Ltd. had a tax liability. It is important to note that both 594710 BC Ltd. and 671705 BC Ltd. had been assessed under the GAAR at different stages.
The TCC considered whether the GAAR was properly applied to 671705 BC Ltd. in relation to the underlying transactions resulting in the tax debt at issue. The Court found that the GAAR did not apply. It found that there was indeed a tax benefit and an avoidance transaction, but that there was no misuse or abuse of any provisions of the Act.
Specifically, with respect to 594710 BC Ltd., The TCC also considered whether the GAAR was properly applicable to enable section 160 to apply. The Court concluded that the GAAR did not apply because there was no tax benefit.
The Crown appealed this decision to the FCA successfully. The FCA held that GAAR applied. The TCC had concluded there was no benefit on the basis of its finding that all transfers had occurred for FMV. The FCA disagreed since there were combined transactions that called the FMV conclusion into question. The GAAR thus applied and the appeal was allowed. One would infer that, if FMV transactions had occurred, section 160 would not have applied
2763478 Canada Inc. c. Canada, 2018 FCA 209 (F.C.A.) (“2763478 Canada”)
In 2763478 Canada, the TCC had found that the GAAR applied and Justice Noel affirmed its decision for the FCA. The facts in 2763478 Canada are similar to those in the Triad Gestco decision. The Court was essentially tasked with determining whether a paper loss on capital property could withstand scrutiny under the GAAR.
During the tax year at issue, the Appellant was used as an investment vehicle by Richard Jobin (“Mr. Jobin”), its sole shareholder. Mr. Jobin also owned Le Groupe AST 1993 Inc. (“Groupe AST”). The tax plan involved the sale of Groupe AST to an unrelated corporation. The steps of the plan created a paper loss. In the TCC , the Appellant conceded a tax benefit, and the Court found that there was at least one transaction in the series with no bona fide non-tax purpose. Thus, an avoidance transaction existed. Finally, the Court used the reasoning in Triad Gestco to conclude that the benefit resulting from the series frustrated paragraphs 38(b), 39(1)(b) and 40(1)(b) of the Act. The taxpayer appealed.
The Appellant alleged errors in the TCC . Firstly, the Appellant argued that there was no “true” tax benefit. Secondly, the Appellant contended that there was no “series of transactions” in the traditional sense. Thirdly, the Appellant argued that each step in the series was bona fide. Finally, the Appellant argued that there was no abuse. The argument was that the notion of a “paper loss” was not addressed in the Act, and that there was at least one instance where the Act recognizes what is not otherwise a true economic loss. The Appellant had argued that the capital cost allowance regime allows for the deduction of depreciation where the asset may not have in fact depreciated, or the asset may have depreciated at a slower rate than the rate allowable under the Act.
The Crown argued that no errors had been made by the trial judge. The purpose of the series of transactions was to create a tax loss. Although the steps of the plan complied with the letter of the law, the plan in totality was contrary to the object, spirit and purpose of the Act.
The Court found that the recognition and declaration of the capital loss on the sale of the Class A shares was a benefit, since it reduced the tax otherwise payable by the Appellant. Whether a transaction is part of a series is a question of fact, and the FCA found that the TCC did not err in finding that the transactions at issue constituted a series. There was an avoidance transaction because the he FCA found that none one of the impugned transactions had a bona fide purpose non-tax . The Court held that a “paper loss” would in fact frustrate the capital gains regime.
An important side note: the Court dismissed the CCA argument raised by the Appellant, because any excessive or insufficient CCA is eventually dealt with through the mechanisms of terminal loss or recapture.
The underlying theme of the foregoing analysis is the difficulty a party faces in appealing a TCC decision on an assessment based on GAAR . It seems that one must be clear-eyed about one’s intention in entering into a transaction. More important, however, and as the Quinco decision indicates, taxpayers should be taking the GAAR into consideration at both the planning and filing stages.
It would seem that, based on a review of the foregoing decisions, and indeed on most GAAR decisions in general, the true battleground between the parties is at the abuse stage. Taxpayers often concede the tax benefit and the avoidance transaction but dispute the misuse or abuse of the provisions. This is likely because usually it is all too easy for the Crown on the evidence in most cases to persuade a court that there was both a benefit and an avoidance transaction. In 2019, it is quite likely that the FCA will decide many important GAAR appeals. It will be interesting to see if the same types of issues (surplus strips, loss-trading, etc.) prevail and the extent to which the Court applies the abuse portion of the analysis consistently.
 The eight decisions are reviewed in the order in which they were decided by the FCA.
 Leave to the Supreme Court of Canada refused.
 A taxable capital gain was backed out of the reassessed amount.
 Canada v. Oxford Properties Group Inc., 2018 FCA 30 (F.C.A.) (Oxford) at para. 13.
 Ibid. at para. 73.
 This should be contrasted with Justice Graham’s decision in The Bank of Montreal v. The Queen, 2018 TCC 187 (T.C.C. [General Procedure]), where he found no benefit and that the GAAR did not apply as a result.
 1245989 Alberta Ltd. v. Canada (Attorney General), 2018 FCA 114 (F.C.A.) at paras. 30-32.
 In an appeal of a section 160 assessment, a taxpayer is entitled to challenge the assessment issued to the underlying tax debtor on any grounds that would have been open to that debtor if it had appealed directly (Gaucher v. R., 2000 D.T.C. 6678,  1 C.T.C. 125 (Fed. C.A.)).