by Jason Rosen

AccountingOctober 14, 20164 comments

Considering Judicial Review?

The Canada Revenue Agency (“CRA”), like all other government decision-making bodies, are accountable for their actions. The Income Tax Act (“Act”) places upon the Minister of National Revenue the duty of administering and enforcing the Act. This includes quasi-judicial and purely administrative functions.

There are many instances where the CRA renders a decision that may be considered unreasonable in the circumstances. It is these situations where it may be necessary to invoke the Court’s supervisory jurisdiction over an administrative action. This is known as Judicial Review.

Decisions of the CRA that can warrant a judicial review application pursuant to section 18 and 18.1 of the Federal Courts Act, include, but are not limited to:

1. Failing to waiver or reduce interest and penalties;
2. Denying your acceptance into the voluntary disclosure program;
3. Not exercising the Minister’s discretion to process tax returns or adjustments that are more than 3 years late; and
4. Enforcing legal action against a director when there should be no personal liability.

When reviewing a decision on the standard of reasonableness, the analysis will be concerned with the existence of justification, transparency and an ability to understand the decision making process and whether the decision falls within a range of possible, acceptable outcomes which are defensible in respect of the facts and law.

This application should be made within 30 days after the time the decision was first communicated to the taxpayer.

There has been a recent trend for taxpayers to seek judicial review from the CRA’s decision not to grant relief from penalties and/or interest under subsection 220(3) of the Act, in addition to reviewing decisions regarding whether a voluntary disclosure is indeed voluntary or not.

In our experience, the Department of Justice (lawyers for CRA) have been settling these cases, as they recognize the inadequate decisions currently being made by the CRA.

Here at R&A Tax Law, we have the expertise and the knowledge to commence Judicial Review applications of any and all CRA decisions. If you think the CRA made an unreasonable decision on your file, give us a call today to see how we can help!

Case Law

Worsfold v. MNR, 2012 CarswellNat 2218 (FC) –  The Voluntary Disclosures Program and Judicial Review

Grundy v. Canada, 5 CTC 13 – Taxpayer Relief and Judicial Review (unsuccessful application)

Singh v. Canada, 2005 FC 1457 – Taxpayer Relief and Judicial Review (successful application)

Dunsmuir v. New Brunswick, 2008 SCC 9 – Reasonableness Standard in Judicial Review

Additional Resources:

Law Society of Upper Canada

Federal Court

**Disclaimer

This article provides information of a general nature only. It does not provide legal advice nor can it or should it be relied upon. All tax situations are specific to their facts and will differ from the situations in this article. If you have specific legal questions you should consult a lawyer.