Tax Court proposals

We have written several postings related to the proposed changes in the Tax Court Act and Tax Court Rules. To review, the proposed changes seek to increase the Tax Court Informal Procedure Limits (i.e., monetary increase), allow the Tax Court to dispose of issues raised in an appeal separately and allow the Tax Court to determine questions (i.e., pro tanto judgments) and bind multiple taxpayers with the same issue (i.e., common questions).

In June 2012, the Bottom Line asked me to provide my thoughts on the proposed legislation. I repeated my caution that — if implemented as drafted — the proposed legislation would cause taxpayers and the Tax Court to suffer from some unintended consequences and that the proposed amendments should be reformulated. “The proposals are a good starting point. However, the changes need to be carefully considered.” The Bottom Line published its article entitled: Tax court gets mixed reception.

Following my contributions to the Ontario Bar Association submissions, the Bottom Line article and the Department of Finance’s (“Finance”) release of the draft legislation, I was asked to participate in a joint response to respond to the draft legislation. I accepted on the basis that I believed that it was important that the Canadian Bar Association Tax Executive and Tax Court Bench & Bar Committee provide its position to Finance.

In addition, I was very disappointed that Finance did not implement any of the suggested changes to the proposed legislation. It is submitted that the pace that Finance is pushing through this important draft legislation is – uncharacteristically – quick. Moreover, it is odd that Finance did not implement any of the responses or suggested changes to the draft legislation.

In any event, I am happy to have had the opportunity to work with the Canadian Bar Association’s Tax Executive and the Tax Court Bench and Bar Committee to respond to the Department’s draft legislation and reiterate our concern that the proposed changes may have negative effects and that Finance should amend the draft legislation.

We keep working towards change and we will provide another update as soon as Finance provides its response.