Tax Matters

Jamie Golombek

As managing director of tax and estate planning with Canadian Imperial Bank of Commerce's wealth advisory services division in Toronto, Jamie Golombek is quoted frequently in the national media as an expert on taxation.

Although clients can take the CRA to the Tax Court of Canada, they need to be aware of the public exposure that may come their way

By Jamie Golombek |

Most of your clients will likely already have received their 2016 Notice of Assessment from the Canada Revenue Agency. If they disagree with their assessment, they have the right to file an objection. If, ultimately, clients' objections aren't resolved in their favour, they're entitled to their proverbial "day in court" and can appeal the (re)assessment to the Tax Court of Canada.

But before your client runs off to court, you may want to remind them that court is an open forum. For one, the public generally can attend their trial — a notice of all Tax Court cases, along with hearing dates and locations, searchable by a taxpayer's name, is easily available online. Furthermore, the court's website warns that "if reasons for judgment are issued in your appeal, they may be published on the Internet and/or in other publications, as the public has a right to this information."

If your client has done something particularly dodgy on his or her tax return that he or she may be ashamed of or might be embarrassed about if his or her employer, co-worker, client, friend, relative or even ex-spouse were to see, you may want to advise the client to think twice about whether the dollars involved in the appeal are worth the public exposure.

Take the recent case in which a taxpayer brought a motion requesting a publication ban of the Tax Court's reasons in a prior case involving that same taxpayer on the basis that if the reasons for judgment were published on the Tax Court's website, "the personal information and unflattering descriptions of his business acumen contained in those reasons, would attract the attention of criminals resulting in financial and physical harm to himself, his family and the public." The taxpayer also requested a ban of any reasons published for this motion.

A taxpayer who wants to limit openness to court proceedings and freedom of expression has to prove that such a limitation is justifiable, given the circumstances of their case. The courts have found that purely personal risks — such as negative media publicity, damage to personal reputation, embarrassment or potential economic harm — are not sufficient to dislodge the open court principle.

The judge hearing the motion cited a prior case and wrote that "the personal concerns of a litigant, including concerns about the very real emotional distress and embarrassment that can be occasioned to litigants when justice is done in public" are not, on their own, sufficient grounds to justify a publication ban.

The judge refused to grant the publication. This serves as a reminder that clients really need to think twice before jousting publicly with the taxman.

Read: Helping clients through a tax audit

 

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