CRA explains why it has appealed Cameco

CRA has appealed Cameco, where the Court dismissed CRA’s application to question 25 corporate employees in the course of an audit, noting that this would essentially amount to a discovery process without the related procedural safeguards.

CRA considers that the audit process is necessarily and generally a broader process than the discovery process, because the former is directed at determining what the taxpayer did in order to come to an accurate assessment of tax, whereas in tax litigation, there is an attempt to narrow and focus on the issues still in dispute. Although for the Cameco audit, 25 interviews seems like a lot, in the context of a large transfer pricing matter, the taxpayer should have offered 5 or 10.

Neal Armstrong. Summary of 20 November 2017 CTF Annual Conference - CRA Panel on Issues in the Administration and Enforcement of the ITA, Q.12 under s. 231.1(1)(d).