{"id":153,"date":"2012-10-17T21:39:27","date_gmt":"2012-10-17T21:39:27","guid":{"rendered":"https:\/\/thor.ca\/\/blog\/?p=153"},"modified":"2025-02-12T13:31:04","modified_gmt":"2025-02-12T21:31:04","slug":"application-of-the-charter-of-rights-to-s-163-2-advisor-penalties","status":"publish","type":"post","link":"https:\/\/www.thor.ca\/blog\/2012\/10\/application-of-the-charter-of-rights-to-s-163-2-advisor-penalties\/","title":{"rendered":"Application of the Charter of Rights to s.163.2 Advisor Penalties"},"content":{"rendered":"

The following blog was co-written by Greg DelBigio and Natasha Reid:<\/em><\/strong><\/p>\n

In a presentation made to members of the Canadian Bar Association Tax Subsection in November of 2011, the CRA provided statistics and information on the application of third-party advisor penalties under section 163.2 of the Income Tax Act<\/em>. \u00a0Six categories of false statements were presented as of interest to the CRA for the purposes of the section:<\/p>\n

1.\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Fictitious expenses\/amounts<\/p>\n

2.\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Appropriation of funds and invalid journal entries<\/p>\n

3.\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Donation arrangements<\/p>\n

4.\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 RRSP strips<\/p>\n

5.\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Valuation misrepresentations<\/p>\n

6.\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 SR&ED claims<\/p>\n

At the time (the CRA\u2019s stats dating to September 2011), only three of the 52 cases assessed by the CRA had proceeded through the Appeals Division to the Tax Court of Canada, and no appeals had yet been decided. \u00a0The first judgment of the Tax Court on section 163.2 was recently released on October 2, 2012 (Guindon v. The Queen<\/em>, 2012 TCC 287).<\/p>\n

In Guindon, the court conducted a constitutional analysis of s.163.2 and concluded that the section should be considered as \u00a0criminal offence rather than a civil proceeding. Though the court did not elaborate, the court in Guindon acknowledged that this conclusion has \u201cfar-reaching consequences\u201d in that the conclusion requires that Charter of Rights protections are engaged in s.163.2 proceedings.<\/p>\n

The Guindon decision has far reaching consequences for those who may be subject to third party penalty proceedings. \u00a0More particularly professional advisors must give careful consideration to the decision before giving advice upon the defence against third party penalty proceedings.\u00a0 To ensure that all available defences are used to object to these proceedings and to defend against the severe penalties that may flow from these proceedings, it is necessary to carefully determine which Charter of Rights protections are engaged and how best to advance a defence through those protections.<\/p>\n","protected":false},"excerpt":{"rendered":"

The following blog was co-written by Greg DelBigio and Natasha Reid:<\/em><\/strong><\/p>\n

In a presentation made to members of the Canadian Bar Association Tax Subsection in November of 2011, the CRA provided statistics and information on the application of third-party advisor…<\/p>\n","protected":false},"author":12,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[52],"tags":[],"class_list":["post-153","post","type-post","status-publish","format-standard","hentry","category-tax-blog-general"],"_links":{"self":[{"href":"https:\/\/www.thor.ca\/blog\/wp-json\/wp\/v2\/posts\/153","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.thor.ca\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.thor.ca\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.thor.ca\/blog\/wp-json\/wp\/v2\/users\/12"}],"replies":[{"embeddable":true,"href":"https:\/\/www.thor.ca\/blog\/wp-json\/wp\/v2\/comments?post=153"}],"version-history":[{"count":1,"href":"https:\/\/www.thor.ca\/blog\/wp-json\/wp\/v2\/posts\/153\/revisions"}],"predecessor-version":[{"id":2855,"href":"https:\/\/www.thor.ca\/blog\/wp-json\/wp\/v2\/posts\/153\/revisions\/2855"}],"wp:attachment":[{"href":"https:\/\/www.thor.ca\/blog\/wp-json\/wp\/v2\/media?parent=153"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.thor.ca\/blog\/wp-json\/wp\/v2\/categories?post=153"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.thor.ca\/blog\/wp-json\/wp\/v2\/tags?post=153"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}