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If a CRA or DoJ lawyer recently contacted you regarding a tax dispute you're not directly involved in, following the completion of an audit, you might feel uncertain about how to proceed. You may have questions about your rights, your responsibilities, and the potential implications of sharing information. This article aims to help you understand what to expect and how to respond if you find yourself in this non-party and post-audit scenario.
Please note that the rules differ at various stages of tax disputes; therefore, consider this as general guidance tailored mainly to CRA and DoJ inquiries concerning other taxpayers after the audit stage has concluded. This article should not be considered legal advice.
As a non-party to a tax dispute, it is crucial to consult with a lawyer to receive advice specifically tailored to your situation.
Safeguarding Your Interests
First and foremost, remember that you can choose not to talk to the CRA or DoJ if you don't feel comfortable. In many cases, non-parties don't have a legal duty to give information or answer questions. Engaging in discussions with the CRA or DoJ without fully understanding the implications can lead to several risks:- You might inadvertently provide information that could implicate you or expand the investigation to include your affairs, even if you initially were not the focus.
- If the information you provide is incomplete, inaccurate, or misleading, you could face other legal consequences, particularly if it affects the outcome of the dispute.
- Your involvement could deepen, potentially dragging you into legal matters or the tax dispute more significantly than anticipated.
We strongly suggest consulting with a lawyer who specializes in tax law before deciding to engage with the CRA or DoJ. This step ensures that you safeguard your interests and rights.
Enhancing Clarity and Control: Opt for Written Questions
People who want to safeguard their interests will insist the inquirer email their questions, rather than discussing them over the phone. It is reasonable to expect the inquirer will attempt to pressure and persuade you to engage directly. However, written communication will give you more clarity and control, and the opportunity to show the communication to a lawyer if needed. Here are three ways to politely and professionally tell the inquirer to send written questions:- "I prefer email so I can understand your needs and questions, and make sure my answers are correct."
- "If possible, I’d like to get this conversation started via email. That way, I have notes to refer back to and can easily loop in anyone else who needs to be in the know. If we still think a call is necessary after getting this groundwork laid out, we can pick a time to chat."
- "I want to make sure I’m prepared to give you all of the information you need. Please email me the questions you’re aiming to have answered? I’ll reply to what I can via email, and if necessary, we can schedule a call to discuss the rest."
Understanding Potential Misconduct
Be aware that the DoJ and CRA do not always adhere to the rules or act in a professional way. For instance, a non-party reported to us that a DoJ lawyer threatened to initiate a CRA audit into their affairs unless they agreed to support their version of the facts at trial. We took steps to address the situation. Unfortunately, improper CRA conduct has become somewhat expected. The case law includes examples of improper and unlawful CRA behaviour.
This behaviour violates professional conduct rules, and we suggest you simply refuse to cooperate. If the CRA or DoJ makes an implicit or explicit threat, consult a tax lawyer to understand your rights, and consider lodging a formal complaint with the Office of the Taxpayers' Ombudsperson and contact the law society when appropriate.
Decline for Safety & Reduce Odds of Legal Entanglement
When you receive inquiries regarding a tax dispute you're not directly involved in, consider the merits of discretion as practiced by many in similar situations. Choosing not to provide information often serves to prevent potential legal complications and protect your privacy. By opting to respond in writing with a clear declination, you align yourself with the cautious approach recommended by legal experts in these matters.
If you decide to decline to answer the inquiries altogether, consider using these common and professional approaches:
- "Thank you for your inquiry. I won’t be participating in this discussion. Any further communication should go through my lawyer, [Lawyer's Name], copied here."
- "I understand that you’re working hard to gather the information you need. However, I’ve decided not to provide any information on this matter because I believe it’s important to protect my time and avoid unnecessary involvement. I ask that you respect this decision, and I hope you understand my position."
- "I understand the importance of your inquiry and appreciate your diligence in reaching out. To protect my personal and legal interests, I won’t be participating in this discussion. Any further communication should go through my lawyer, [Lawyer's Name], copied here. I hope you can appreciate my decision to take this approach."
Talk to a Tax Dispute Lawyer
If you feel uncertain about your next steps or have concerns about possible legal implications, it’s wise to consult with a lawyer who specializes in tax disputes. A lawyer specializing in this field has the expertise and experience to provide you with specific advice, clarify your rights and obligations, and guide you through the complexities of the situation with greater confidence.
Remember, the rules and procedures can vary significantly depending on the stage of the tax dispute. This article provides general guidance focused on CRA and DoJ inquiries after the audit stage and should not be taken as legal advice. To ensure your approach is appropriate for your unique circumstances, again, we strongly recommend seeking legal counsel tailored to your specific situation before engaging with the CRA or DoJ.
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