• Taxpayers Not “Over a Barrel” After All
  • June 5, 2013 | Authors: Patrick L. Lindsay; Salvatore Mirandola
  • Law Firms: Borden Ladner Gervais LLP - Calgary Office ; Borden Ladner Gervais LLP - Toronto Office
  • In Ficek v. the Queen, the Canada Revenue Agency (“CRA”) was taken to task for delaying assessments (and refunds) against taxpayers who had participated in a tax shelter scheme. The evidence included internal CRA communications to the effect that CRA felt that it had the relevant taxpayers “over a barrel” by withholding assessments and refunds in order to deter further participation in the tax shelter. The Federal Court concluded that this was an improper reason to delay assessment and held that CRA had failed to comply with its duty to assess taxpayers within a reasonable time. The case is another recent example of CRA unsuccessfully using its administration or enforcement powers to try to shape taxpayers’ behaviour by “chilling” participation in transactions of which CRA does not approve.