Market value of donated art was not individual retail value of each donated art print

Tax – Income tax – Administration and enforcement

Program was conceived, in which participants would invest minimum amount of $3,500 in art, get donation receipt for $10,000 and get 43 per cent return. Between taxation years 1998 and 2004, taxpayer paid $383,937 in art donation program and claimed $2.3 million in donation tax credits. Minister reassessed accused, determining that taxpayer was entitled to donation tax credits based on amount paid into program, as this was fair market value of art. Taxpayer was one of several taxpayers who unsuccessfully appealed Minister's reassessment and since then, other lead litigants had either abandoned or settled their appeals. Two expert reports were entered by two art appraisers but were excluded by trial judge. Trial judge found one report did not meet mandatory requirement of Rule 145 under Tax Court of Canada Rules, and second report was excluded, because it did not meet threshold of impartiality, objectiveness and independence. Trial judge also found that market value of donated art was not individual retail value of each donated art print and that Minister's assumptions were not destroyed. Taxpayer appealed. Appeal dismissed. Trial judge did not err in rejecting first expert report concerning Rule 145, because it was open to trial judge to find that adjourning this matter would have prejudiced administration of justice. Further, excluding first expert report did not cause very serious prejudice to taxpayer, as expert's report was substantially to same effect as his appraisal reports, which were included in evidence. Trial judge did not err in rejecting second expert's report, as that expert was involved in art donating program and this was not case of mere employment relationship.

Roher v. Canada (2019), 2019 CarswellNat 9174, 2019 FCA 313, Johanne Gauthier J.A., Yves de Montigny J.A., and Mary J.L. Gleason J.A. (F.C.A.); affirmed (2019), 2019 CarswellNat 137, 2019 TCC 17, Eugene P. Rossiter C.J. (T.C.C. [General Procedure]).

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