Case information

Taxation – Income tax – Assessment – Applicant ordered to provide information and documents to respondent pursuant to s. 231.7 of the Income Tax Act, R.S.C. 1985, c. 1 (5th Supp.) – Whether it is illegal for Canada Revenue Agency to mail out letters to taxpayers requesting documents to be duplicated and submitted for inspection – Whether compliance order may be sought – Whether Canada Revenue Agency must obtain consent to enter premises of taxpayer and must inspect documents on-site with authorized person to answer any questions.

Case summaries are prepared by the Office of the Registrar of the Supreme Court of Canada (Law Branch). Please note that summaries are not provided to the Judges of the Court. They are placed on the Court file and website for information purposes only.

On April 16, 2014, the Canada Revenue Agency (“CRA”) notified the applicant, Mr. Beima by letter that his income tax returns for the 2006 to 2010 tax years, which were under objection, and his returns for the 2011 and 2012 taxation years, which were not yet assessed, were under review. The CRA provided Mr. Beima with a list of specific records that it required in order to carry out the audit. It was agreed that the audit would begin on a particular date. When the two auditors and team leader arrived at the agreed upon location, Mr. Beima would only allow one auditor into the premises and further advised that he would be videotaping the audit process. The CRA officials decided not to proceed with the audit at that time. The CRA subsequently notified Mr. Beima by letter that it had the authority under s. 231.1 of the Income Tax Act to inspect requested records and that failure to submit the requested records by the specified date would result in the CRA seeking a compliance order. The application judge issued the compliance order, requiring Mr. Beima to produce the requested documents for inspection. This decision was upheld on appeal.