Extract from Conclusions
The rules that Revenu Québec must follow to enter into a valid transaction at the administrative stage are numerous and demanding. Revenu Québec must ensure that:
- The conditions particular to the transaction are respected;
- The taxpayers have given free and informed consent to it;
- The process is carried out in keeping with the duty to act fairly.
Further to the investigation it conducted, the Québec Ombudsman concluded that Revenu Québec had not instituted adequate means for ensuring that these rules are followed. It is crucial that Revenu Québec establish clear guidelines for the transaction process. These guidelines must be built into its policies, directives and other rules of a similar nature. Moreover, so that these rules are known and uniformly applied, Revenu Québec must provide work instructions and reference tools that fulfil these requirements and train the staff authorized to enter into transactions
8 Recommendations
R1 Modify fiscal Directive CMO-2976 on transactions and any other work instructions concerning transactions to exclude the possibility of entering into them when:
- The evidence on record is insufficient to support Revenu Québec’s position;
- The work required by Revenu Québec to constitute adequate evidence is disproportionate to the benefits it can derive from it;
- Revenu Québec’s single goal is to avoid an unfavourable decision
R2 Establish clear guidelines to ensure that taxpayers’ rights are upheld throughout the transaction process, which should provide that:
- Taxpayers have at hand all relevant and useful information for making an informed decision.
- Taxpayers understand this information;
- Taxpayers have had the opportunity to complete their file and presenttheir observations;
- Taxpayers understand the consequences of the transaction and waiving of judicial recourse;
- Taxpayers freely consent to the agreement in the absence of any constraints;
- A decision can be rendered on the basis of a complete file if negotiations do not lead to an agreement;
- The terms of the agreement comply with the law;
- Concessions are reciprocal.
R-3 Train all staff who are authorized to enter into transactions, including team leaders and managers.
R-4 Establish a uniform prior-approval procedure to ensure that files likely to involve transactions are complete and that they can qualify for such a proposal.
R-5 Establish an administrative review mechanism for transactions whose validity is questioned by taxpayers.
R-6 Establish a file system within each section authorized to enter into such agreements for identifying proposed or finalized transactions.
R-7 Produce guidelines within each section authorized to enter into such agreements for documenting proposed or finalized transactions.
R-8 Publish the relevant data concerning transactions that have been finalized at the administrative stage.
The Québec Ombudsman asked Revenu Québec to, by April 30, 2020, send it an action plan and timeline for implementing its recommendations and, subsequently, a copy of the modifications that will be made to Directive CMO-2976 concerning transactions and to any other documents before they take effect.
