Canadian taxpayers have a number of obligations to satisfy when being audited by a revenue agency. These obligations are intended to satisfy the agency that the taxpayer has complied with the tax laws, and include the production of documents and information upon request. The taxpayer who fails to cooperate risks the consequences of non-compliance, such as an arbitrary or even unreasonable assessment. Agencies enjoy extensive, but not unlimited, powers to ensure that taxpayers comply with the tax laws.
A taxpayer has several options when faced with an abusive exercise of these powers. Over the years, these options have multiplied to the point where several professionals, out of necessity, have become specialized. This article summarizes these options and the circumstances in which each one should be used.
Taxation is rapidly evolving and there are multiple causes for its evolution, be it a result of following recommendations submitted to agencies by citizens’ rights groups or in response to recent court decisions, to name just a few. This context explains why Revenu Québec recently relaxed its tax collection policy and why Revenue Canada’s requests to notaries and lawyers to produce documents are now illegal. In tax matters, the application of complex rules with respect to claiming credits also warrants further discussion.
To consult the document, click here (only available in French).