The landscape of tax litigation has changed significantly over the last seven years. Canada Revenue Agency is under increasing pressure to generate revenues, resulting in increased audits, heavier information demands, larger adjustments with corresponding interest charges, and harsher collections actions. The enactment of new legislation in recent years also increased the volume and detail of disclosures to the government, and added uncertainty on tax filing positions.
Taxpayers are resorting to litigation more and more to resolve their tax disputes, but navigating the system has become increasingly complex over the years. In fact, the Federal Budget recognizes that the Courts require additional support to address a growing and increasingly complex caseload by allocating $41.9 million over five years to the Federal Courts, including the Tax Court.
Gone are the days where both parties in a dispute jointly worked on narrowing the underlying tax issues and moving the matter along so as to reach a resolution on the merits of an appeal in a productive and efficient manner.
Today, procedural skirmishes litter the playing field, as Crown counsels have taken a more adversarial approach to tax litigation and have been challenging not only the legal bases for taxpayers’ positions, but also the factual underpinnings of every case. This makes it extremely important for in-house counsel to shape responses, even at the audit and appeals stages, with a view to ensuring that they are well positioned for an appeal at any level of the Court system, if necessary.
Tax litigators are experienced in dealing with the Courts in tax disputes, and have the expertise to devise a successful litigation strategy.
If you find your business is under the tax microscope, engaging an experienced Tax Litigation and Dispute Resolution team can help you take control and manage the dispute process towards the best possible end result.
For more information, contact Justin Kutyan, Partner, Tax Litigation & Dispute Resolution, KPMG in Canada 416-777-3266 [email protected]