RECENT TAX COURT CASES ON ISC BUSINESS EXPENSES
THE FIRST HURDLE: PROVING YOU ARE CARRYING ON A BUSINESS!
The Canada Revenue Agency (the “CRA”) continues to scrutinize business expenses claimed by taxpayers, particularly where business losses are involved. These audits can impact Independent Sales Contractors (“ISCs”) of direct selling companies.
While ISCs are responsible for claiming their own business expenses, the CRA may go further than auditing expenses and can also question whether the ISC is really “carrying on business” at all. Two recent Tax Court of Canada (“TCC”) decisions in the direct selling space demonstrate the tests the TCC applies.
Tagged in:
Auditing Expenses
Carrying on a Business
Independent Sales Contractors
Multilevel Marketing Businesses
Taxpayers
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