Tax Law Services Portfolio Office
July 2011

4. OBSERVATIONS – ADVISORY SERVICES

A pilot project is under way that encourages the expanded use of advisory services prior to litigation.

The volume of high complexity litigation cases proceeding to the Tax Court of Canada continues to increase annually with many of them being large and resource-intensive. Failure to adequately defend these cases can result in risk not only to the tax base but also to future areas of tax compliance. The International and Large Business Directorate of the CRA’s Compliance Programs Branch and the TLS Portfolio have jointly undertaken a Pilot Project aimed at increasing the use of advisory services at the audit stage of the tax assessment process.

During the audit, TLS regional directors and CRA LSU counsel noted that expanded use of advisory services such as that contemplated by the pilot project could lead to program savings through a reduced volume of litigation. The Operational Guidelines for the pilot project, which set out its mandate, require the provision of legal advice and legal assistance for significant cases, issues, and trends, and establish the arrangements for consultation and formal review. The LSU is providing and coordinating advice to the CRA on major files at the assessing stage and regional litigators are supporting tax auditors by providing formal and informal legal advice. Such advisory services ensure that appropriate evidence is collected, that substantive and procedural matters are addressed, and that tax assessments are correct in law.

We support the direction of the pilot project in encouraging an expanded use of advisory services as a significant measure of avoiding litigation costs. As the TLS Portfolio Office pursues further areas where potential savings are possible, this will only further strengthen and build the trust relationship that has developed with the client.

Date modified: