Tax assessments may be challenged on grounds which are not contained in tax legislation. Canadian law guarantees certain fundamental rights in dealings with any government authorities.
The Canada Revenue Agency has just revised its "carrying on business" policy. This policy is critical for non-residents and any person who does business with non-residents.
The CRA voluntary disclosure program does not have the authority to resolve certain classes of errors. Disclosure of an ineligible class of error will result in the imposition of full interest and penalties.
Canadian GST legislation contains a number of procedural relief provisions for taxpayers on audit. Relief will not be available to taxpayers who do not bring these provisions to the attention of the audit staff in a timely manner.
Interest and penalties can be reduced to 4% in a WASH based GST assessment. The taxpayer must apply for the relief.
A WASH based voluntary disclosure will result in the application of no interest or penalties.
The CRA is prohibited from "sawing off" an amount owing on assessment. For example, if the CRA recognizes a weakness in its case it is not entitled to settle for 50% of the amount owing in the assessment.
Where a taxpayer appeals a tax assessment to the courts the taxpayer is bound by the strategy adopted at the notice of objection stage.
A reimbursement is generally considered for GST purposes to be consideration paid in return for a taxable supply. It is not uncommon for registrants to forget to collect GST from the party who is providing the reimbursement.
Where litigation privilege exists information which you provide to your lawyer will be protected from scrutiny by the government. This common law protection is intended to encourage you to speak candidly with your lawyer so that they can best assist you. This is an important tool for protecting strategies and other sensitive information.
Missed deadlines for filing tax documents (including refund claims and appeal documents such as the notice of objection) can often be extended on application to the court or to the relevant government body.
Terms which are not defined in tax legislation can find their meaning in any one of a number of places. Some of the places which can be explored in determining the meaning of phrases are the explanatory notes, hansard and parliamentary debates.
Purchasers of a business often waive the requirement that the vendor obtain retail sales tax clearance certificates. Where such a waiver is given the purchaser can be held liable for any tax discrepancy of the vendor including intentional acts such as fraud.
A director of a failing corporation should take active steps to ensure that the tax obligations of the corporation are met. In the event that those obligations are not met the director will need to prove that they have met their personal responsibilities.
A director of a corporation can be held personally liable for fraudulent activities undertaken by employees, agents or other directors. Absence of awareness of the fraud is not typically a good defence.
A director who is being assessed under the director’s liability provisions has a number of defensive options available to fight the assessment. In many cases some of the available lines of defence are never explored.
On the purchase of a business a director of the purchasing corporation can be held personally responsible for tax obligations of the vendor corporation of which the purchaser had no knowledge. Proper preparation can alleviate this risk.
Tax settlements the terms of which are inconsistent with the underlying tax legislation (for example, the Excise Tax Act) can be set aside at any time. There is no statute of limitation on the setting aside of judgments. 
