When Accountant Advice Creates Privilege Gaps in Tax Disputes

Coopers Park (2024 TCC 122) shows CRA intensifying its push to access accountant communications in tax disputes. The risk rises when legal and accounting teams blend, and it remains invisible until the consequences are irreversible.

Key Takeaways

• Hidden gap when professionals blend: The distinction between legal and accounting roles is easy to miss. When privilege fails, CRA gains access to strategy and analysis that can reshape the dispute and create consequences not only for the outcome but also inside the organization.
• Sensitive inflection points: Strategy, advice, fact, and evidence converge at key moments: during planning and, critically, after CRA’s audit when a reassessment is issued. That is when the file shifts from audit into dispute, and disclosure changes outcomes. 
• Privilege is narrow: Courts extend solicitor–client privilege only to communications with a clear legal purpose. The default is that accountants’ work is treated as producible.
• Labels don’t control: Engagement letters or copied emails may create the appearance of protection, but the Tax Court will examine substance and will often order disclosure.

The Situation

In Coopers Park, CRA challenged privilege claims over accountant-created documents, including memoranda, emails, and strategy papers. The taxpayer argued that accountants were acting as agents in communications with counsel.

The Court reviewed the engagement letter, the documents, and the roles of two law firms and an accounting firm. The Court found little evidence that the accountants were operating within the solicitor–client channel. The Court ordered Coopers Park to produce communications and documents.

What Made the Difference

The Court accepted that privilege can extend to accountants when they act strictly as agents assisting a client in obtaining legal advice. But the communications in question showed accountants and a second law firm providing their own advice, not simply relaying facts for counsel. The Court reviewed the subject documents and saw independent advice. On that basis, the Court ordered disclosure.

The Signal for Business Leaders

Coopers Park demonstrates why privilege failures matter: not in theory, but in their consequences.

When legal and accounting roles blur, CRA gains access to documents that were assumed to be protected — strategy notes, advice, and analysis that can weaken a taxpayer’s position. When disclosure is ordered, that information reshapes the dispute, influences the outcome, and may even raise questions inside the business or at the board level.

A recurring theme emerges: CRA presses to access sensitive information created earlier, the disclosure risk stays hidden until tested, and the consequences are irreversible.

Closing Note

The Court’s reasoning in Coopers Park underlines a recurring risk: when multiple professionals collaborate without clear role separation, privilege gaps emerge. What looked protected collapsed when tested, and CRA gained access and reshaped the dispute.

The risk to taxpayers is most acute in accountant-led dispute teams within firms that are not law firms, and in dual-function institutions where legal and accounting functions sit under one roof. In these settings, the privilege gap often remains unspoken or invisible until CRA compels disclosure. By then, the consequences to the taxpayer's position and the outcome are irreversible.

Case reference: Coopers Park Real Estate Development Corporation v. The King, 2024 TCC 122