Our Firm’s General Approach to Tax Dispute Resolution.
Tax disputes most often deal with past events. For those past events, the law is relatively “fixed” and specific client facts are also “fixed in time”. We cannot change the law and we cannot change the facts. What we can do is to try to persuade the CRA or the Courts to accept a more favourable interpretation of the law and/or change their perception of the specific client facts.
Often, the CRA relies on “internal” interpretations of the law and, occasionally, those interpretations may be inaccurate or out of date because of recent court decisions. In such cases, we conduct tax research to find substantial authoritative support for a more favourable interpretation.
Often, the CRA has an incomplete understanding of the facts. This often results because the client, who is usually presented with a standard list of audit questions often has no certain idea of which facts are especially relevant and does not provide what is needed. The client may also restrict himself to merely answering the questions actually asked and has no idea what questions should have been asked in his particular circumstances. Often the client has essential information not known to the CRA.
Occasionally, the CRA has a preconceived idea of what it wants to see and limits itself as to what it will accept as a relevant fact.
Unavoidably, the CRA does its work through individual auditors and assessors and each of these individuals and their supervisors have their own personal views and preconceived ideas and varying levels of experience and training.
Accordingly, having regard to all of the above noted factors, it is not surprising that the CRA could raise an assessment that is considered to be unreasonable and unfair from the clients perspective. The most important thing we can do is to seek to understand the taxing authorities view of the facts. We have to understand their view (and be mindful of their changing views as the process continues) if we are to find a means of persuading them to adopt a more favourable view.
At the same time, we need to continuously refine and assess what additional facts might be relevant (based upon our understanding of the law) and how best to obtain admissible evidence of those facts. We apply a combination of forensic accounting, audit and legal analysis skills with a lot of experience and common sense to the entire fact finding process.
As our understanding of the facts expand, we seek to understand the additional tax law and the non-tax laws which might apply to those new facts.
We obtain copies of the Audit Proposals; Audit Reports; Penalty Reports and Appeals Reports. We interview our clients carefully and frequently and prepare a detailed analysis of the facts and law. We request information from the taxing authorities under the Appeals Renewal Initiative and The Privacy Act or Access to Information Act. We keep notes of discussions with the taxing authorities and with the clients and with any relevant person.
All of the above provides us with the material we need to do our key job most effectively.
In the final analysis, our key job is to persuade the CRA or the courts to accept the facts that are favourable to you and to apply the most favourable view of the law to those facts.
We are a good team and we are very good at our job.