Analysis by Borden Ladner Gervais, Taxand Canada
Our Canadian firm analyses a recent ruling by the Tax Court of Canada in a case involving the Canada Revenue Agency (CRA) and a taxpayer. The CRA requested a tax planning document related to the hybrid sale prepared by the purchaser’s accounting firm. The taxpayer resisted, arguing the document’s irrelevance and citing the absence of an obligation to self-audit. The CRA, however, asserted that full disclosure of relevant documents was mandatory. Ultimately, the Court ruled with the CRA, stating that if a document could be related to the case, it should be shared, even if some information in it was already known. The taxpayer also attempted to invoke accountant-client privilege to prevent disclosure, but the Court rejected this argument, stating that there is no accountant-client privilege for tax advice given by a public accountant.
Laurie Goldbach and Steve Suarez, of our Canadian firm Borden Ladner Gervais analyses this case in further detail here. Arguing the ruling underscores the importance of solicitor-client privilege as the only reliable way to protect sensitive legal analysis from disclosure to tax authorities like the CRA.
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