April 15, 2011

CRA’s Related Party Initiative

Part II – aka the “High Net Worth Project”

Yesterday’s Ontario Bar Association Tax Law Section Conference was a great opportunity for our firm to discuss the Canada Revenue Agency’s (“CRA”) new Related Party Initiative (“RPI”), which targets high net-worth Canadian taxpayers.

The CRA consulted with the Australian Tax Office (“ATO”), which initiated a similar project in or about 1996. At that time, the ATO simply read the Fortune 500 lists to choose targets. The CRA has developed an algorithm to choose targets. It is estimated that the CRA has dedicated over 50 employees to the RPI Teams, including risk assessment officers and large case auditors, i.e., the CRA’s most senior auditors. In addition, the CRA has appointed CRA Special Enforcement Program employees and Aggressive Tax Planning Section employees to the RPI Teams.

As discussed in our firm’s previous post, the CRA is initiating RPI audits by sending a 20-page questionnaire to taxpayers selected for audit. The RPI questionnaire asks taxpayers to disclose sensitive tax information, including, but not limited to, tax planning documents.

A former CRA employee with experience in these matters echoed our firm’s previous recommendation that taxpayers who receive a RPI questionnaire should retain tax legal counsel and that taxpayers should work with tax legal counsel to retain accountants. This way, taxpayers may mitigate risk, protect communications using solicitor-client privilege and identify the information/documents that should not be disclosed to the CRA based on solicitor-client privilege.

Insights

In Glencore Canada Corporation v. His Majesty the King[1] (“Glencore FCA”), the Federal Court of Appeal examined and ultimately rejected Glencore’s contention regarding the tax treatment of...

The Tax Court of Canada’s recent ruling in Fiera Foods Company v. HMK1 has significant implications for businesses claiming Input Tax Credits (ITCs) under the Excise Tax Act (ETA).

When you receive a Notice of Reassessment (NoR) from the CRA and decide to contest it, one strategic choice significantly influences both the resources you commit and the outcome: selecting the most...

Section 111 of the Income Tax Act (“ITA”) allows taxpayers to carry losses back and forward to offset income in different taxation years. However, subsection 111(5) restricts non-capital loss...

Key Points in Glencore The case involves an appeal against a reassessment under the Income Tax Act, where the Minister of National Revenue assessed as income certain fees Falconbridge received due to...

Management M.-A. Roy Inc. v. HMK (“Gestion Roy”) centers around whether an Opco’s decision to pay insurance premiums, with two Holdcos as the policy owners, gives rise to a shareholder benefit under...

Explore more insights >

Susan Farina wearing a dark blue top and dark rimmed circular glasses brightly smiling while sitting at a desk with a pen and paperwork in front of her

What Accountants Say

Peter Aprile is a very hands on and practical tax lawyer who is very focused and diligent. He is a pleasure to work with.

- Susan Farina, Tax Partner, Price Waterhouse Coopers

David Cuddy in a blue button up shirt standing in a park

What Clients Say

I’m a Senior VP with an accounting and finance background. I’ve worked with lawyers and large law firms. I was referred to Counter to fix a tax dispute. It is very rare to encounter lawyers that combine expertise, dedication, and a businesslike approach to litigation. I have no hesitation in recommending Counter.

- David Cuddy, Senior Vice-President, Finance & Business Operations, CFL

Laura Couvrette smiling in a plaid top standing with arms folded

What Accountants Say

Counter Tax Litigators has worked with Fuller Landau to resolve several of our clients’ tax disputes. Counter delivers superior communication.

- Laura Couvrette, CPA, CA, Fuller Landau LLP

Mark Ram standing in a office hallway wearing a white button up with dark blue jacket and dark rimmed glasses

What Clients Say

I spent a good part of my career dealing with attorneys on innumerable matters, and found Peter to be extremely competent, open-minded and exceptionally honest. I would not hesitate to use Peter again, and highly recommend the team at Counter Tax Litigators.

- Mark Ram, Retired CEO

Klaus W. Reif sitting at a desk, dressed in a blue jacket with a silver wrist watch

What Clients Say

Counter’s representation on our behalf was well informed, professional and efficient, which ultimately resulted in a highly satisfactory decision in all aspects.

- Klaus W. Reif, President, Reif Estate Winery

Brian Grott wearing a white button up with a red tie with white dots, softly smiling and leaning against a desk

What Clients Say

I was amazed with the results. They went above and beyond, and I would recommend Counter to any person or business with a significant tax dispute.

- Brian Grott, Northland Screen Corp

How can we help you?

Get in touch

Recognition

Our law firm and tax lawyers regularly receive
recognition as leaders in tax controversy and litigation.

CRA’s Related Party Initiative

Avoiding and Navigating Tax Disputes in the Mining Sector

Tax Disputes & ITC Claim Protection When Suppliers Fall Short

CRA's Objection Process: Full Engagement vs. Strategic Disengagement

Deans Knight Will Have a Serious Impact on Tax Planning & Tax Disputes

Mining in the Tax Court: Glencore’s Challenge to Exclude Fees from Taxable Income

When Insurance Premiums Lead to Unwanted Shareholder Benefits

How can we help you?

Recognition

Subscribe

Stay current with our latest insights.