New powers in the latest budget enable the CRA to demand information under oath, which some lawyers call ‘expansive and draconian’
The government says amendments to the information-gathering provisions in the Income Tax Act, which also include steeper penalties for non-compliance, will 'enhance the efficiency and effectiveness of tax audits' and speed up tax collection.. Get exclusive investment industry news and insights, the week’s top headlines, and what you and your clients need to know.
“For Canadian taxpayers, the implications of this proposal are significant. The requirement to provide information under oath or affirmation adds a layer of legal gravity to the audit process, potentially increasing the consequences of providing false or incomplete information,” states afrom three lawyers at Davies Ward Phillips & Vineberg LLP, adding that “it is unclear why Finance proposed such expansive and draconian powers.
“They’re not judges; their job is not to evaluate whether or not the taxpayer is a good witness when pressed to answer questions orally,” she says. Mr. Friedman says the changes could also have the opposite effect, creating more non-compliance, especially if taxpayers don’t have a legal or tax advisor to help them and choose to deal directly with the CRA.
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