CRA’s Related Party Initiative

Part I

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The Canada Revenue Agency (“CRA”) is launching a new project named the Related Parties Initiative (“RPI”) aimed at wealthy individuals and related entities. The CRA intends to initiate the RPI audits sending a 22 page questionnaire to taxpayers that the CRA has selected for audit.

We recommend that taxpayers who have failed to report taxable income retain legal counsel and initiate a voluntary disclosure as soon as possible. In addition, we recommend that taxpayers who receive the RPI questionnaire retain legal counsel to assist them in providing the CRA with appropriate answers to proper CRA requests for information. Last, we recommend that taxpayers dispute any improper CRA reassessment.

For additional analysis, see our Insights.

Insights

Notice of Objection Window | What Carries Forward | What is placed on the objection record here is not neutral

Filing a Notice of Objection places part of the dispute on the record before it is treated as final. That record shapes how the matter is assessed and what can still be changed.

CRA Dispute Record Formation | Decisions Made Before Clarity

Decisions made after a CRA reassessment form the dispute record before they are recognized as final. That record shapes what can be said, changed, and defended later.

CRA Reassessment | What Happens Next - What appears to require action is visible. What will shape the outcome is not.

A CRA reassessment sets out a position. It does not show what will determine the outcome. How it is interpreted, carried forward, and placed on the record defines what can still be changed.

Leveraged growth leads to CRA reassessments and disputes. This insight explains how exposure modelling, objection strategy, and dispute readiness affect a company’s ability to reduce or overturn a reassessment.

The Post-Reassessment Decision Window in a CRA Dispute

After a CRA reassessment, management must make decisions while the information is incomplete. Those early decisions shape the tax dispute, and lender and board scrutiny.

Management’s First Explanation in a CRA Dispute

This insight explains how management's initial framing of a CRA dispute with partners, lenders, and boards will shape stakeholders' evaluation of management's performance.

Explore more insights >

Related Insights

CRA’s Related Party Initiative

Insights