User:Oceanflynn/sandbox/Irving Oil vs. The Queen

"This sandbox page is to be deleted when the main page article Irving Oil v. The Queen is stable."

Irving OIl vs. The Queen, 1988 16 F.T.R. 253 (TD), is a 1988 decision of the Federal Court of Canada in which Justice Francis C. Muldoon ruled against the Minister of National Revenue of Canada and in favour of the 88-year-old K.C. Irving. The case was heard on May 11, 1987.

Background
In the early 1970s, the Irvings and Standard Oil Company of California (Socal) shared equal ownership and control over Irving Oil Ltd and in 1971, Kenneth "K.C." Irving entered into a tax shelter agreement in Bermuda with Socal. Socal and Irving were the two major shareholders in Irving Oil a major shareholder with the Irving family in Saint-John, New Brunswick-headquartered Irving Oil as well as the Bermuda-headquartered Irving California Oil Co. Ltd. (Irvcal), one of Irving Oil's wholly owned subsidiaries. Using this tax shelter, from 1971 through 1975, Irval purchased crude oil from Saudi Arabia for USD$2.10 a barrel, then sold it to Irving oil at USD$2.90 for the Irving Oil Refinery in Saint John, New Brunswick, Canada. Socal and the Irving family shared the profitsin the form of dividendsequally. During those four years in the 1970s, the oil sales amounted to USD$1.2 billion. On May 11, 1987, Revenue Canada said in a claim to the FCC, that the arrangement between Irving and Socal was was a "sham" which allowed Irving Oil to inflate its costs thereby reducing its taxable income. This resulted in Irving paying no taxes from 1971 through 1975, in spite of making CDN$ million in profits. In a 1978 Revenue Canada reassessment of Irving's tax returns, they disallowed approximately CDN$142 million in costs from 1971 to 1974 from the differential between the Socal price and the price Irving paid.

Judgement
Justice Francis C. Muldoon

Reception
The decision drew criticism.