Federal Appeal


Income tax

Administration and enforcement

Canada Revenue Agency not requiring taxpayer’s consent to copy records

In April 2014, Canada Revenue Agency (CRA) advised taxpayer, by letter, that his income tax returns for 2006 to 2010 taxation years, which were under objection, and his returns for 2011 and 2012 taxation years, which were not yet assessed, were under review. CRA listed specific records it required to carry out audit. Taxpayer would only allow one auditor to enter premises and no other person. CRA decided not to proceed with audit at that time as it was not confident that taxpayer would allow audit to proceed without interference. CRA then notified taxpayer, by letter that s. 231.1 of Income Tax Act provided it with authority to inspect requested records and that taxpayer failed to comply with CRA’s request to submit records. CRA advised that failure to submit records requested by specified date would result in CRA seeking compliance order pursuant to s. 231.7 of Act. Federal Court Judge ordered taxpayer to provide information and documents pursuant to s. 231.7 of Act. Taxpayer appealed. Appeal dismissed. There was no reviewable error in Judge’s finding that taxpayer did not provide required access, assistance or information sought by CRA under Act. Contrary to taxpayer’s understanding, CRA did not require taxpayer’s consent to copy his records. Taxpayer could not dictate how CRA conducted audit or frustrate CRA’s ability to carry out its statutory duties by refusing entry to second auditor or insisting on videotaping audit process. There were no grounds to set aside compliance order.

Beima v. Minister of National Revenue (2017), 2017 CarswellNat 1805, 2017 FCA 85, Stratas J.A., D.G. Near J.A., and de Montigny J.A. (F.C.A.).

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