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 shows why privilege failures matter: not in theory, but in consequence.

When legal and accounting roles blur, CRA gains access to strategy notes, advice, and analysis once thought protected. Ordered disclosure reshapes the dispute, alters outcomes, and may spark boardroom questions.

The risk pattern repeats: CRA pushes for access, privilege gaps stay hidden until tested, and the fallout cannot be reversed.

Closing Note

The Court’s reasoning in Coopers Park highlights how privilege gaps collapse under pressure. When professional roles overlap, protections assumed secure can vanish, and CRA seizes information that shifts the dispute.

The danger runs highest in accountant-led teams outside law firms, and in institutions where legal and accounting functions sit under one roof. In these settings, privilege risks remain invisible until the CRA compels disclosure, and by then, the taxpayer’s position has already weakened.

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