Sometimes an Assignment Is Just an Assignment: Unless the Tax Court Finds It's Not (part II)

Part II: Discussion of the Litigation Issues

In the first part of this case comment relating to the decision of the Tax Court in On-Line Finance & Leasing Corporation v. The Queen, I discussed the leasing issues commented upon by the Court. In this second part, I describe the tax litigation issues to demonstrate how complicated transactions can result in odd outcomes when litigated—particularly, where a successful interlocutory motion has an unanticipated impact at trial. The Crown’s preliminary motion to exclude evidence (the “Preliminary Motion”) was held to apply to evidence that the Crown sought to introduce at trial. This case makes an excellent canvass of the parol evidence rule as it relates to the interpretation of contracts and  breaks new ground, ruling that the Crown is bound by this rule in interpreting a taxpayer’s contract.

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