Friedman – Federal Court does not follow its interpretation in Lin that a requirement letter insufficiently specified who was covered

The Friedmans, a married couple, who had not filed T1135 returns, each received Requests for Information under s. 231.1(1) (“RFIs”) that were addressed to them personally, and stated inter alia:

Your personal income tax returns and any other related or associated entities have been selected for audit … . [Y]ou may have offshore holdings that you have failed to disclose … .

In order to expedite and facilitate our audit, we will require a clear understanding of all entities with which you had a connection or affiliation during the taxation years noted above. …

Please send us back the attached questionnaire fully completed within 30 days … .

The taxpayers refused to provide the requested information, noted that the RFIs’ wording was essentially identical to those at issue in Lin, and argued that, like in Lin, they should not have been required to comply because it was unclear whether the RFIs were directed to them individually or to their related entities. Pamel J rejected these submissions and found in light of the wording of the letters and a reading of the accompanying questionnaire that “the CRA is specifically directing those questions to the Friedmans in respect of their personal tax situation.”

Pamel J also rejected their submissions that the RFIs contravened s. 13 or 7 of the Charter.

Neal Armstrong. Summaries of Canada (National Revenue) v. Friedman, 2019 FC 1583 under s. 231.7(1) and Charter s. 13, s. 7.