Quebec Ombudsperson criticizes the ARQ for not following the Galway principle in settlement agreements

Quebec’s Public Protector (a.k.a. Ombudsperson) has issued a report containing eight recommendations for improvements in the way that the ARQ handles the process of seeking and entering into settlements with taxpayers.

It found that the internal policy of the ARQ has contemplated settling cases where the facts in the record cannot support its position, or the ARQ fears having its reassessments reversed by the Courts. The report found that it was abusive and improper for the ARQ to reassess without an adequate evidentiary foundation capable of surviving judicial scrutiny – and that, in such instances, the reassessment should be dropped. The Public Protector also found that the ARQ has an obligation to ensure that taxpayers are fully informed of the tax and legal consequences of any settlement, and referenced the CRA’s AD-19-01 Audit Agreement and Waiver of Objection Rights Guidelines in this regard.

After listing the eight Recommendations, the Report gave the ARQ until April 30, 2020 to submit an action plan and timetable in response.

Some will consider that this Report is relevant to how the ARQ has been administering the GST/QST.

Neal Armstrong. Summary of 27 February 2020 Report of the Quebec Ombudsman entitled “So that taxpayers’ rights are upheld in payment arrangement proposals with Revenu Québec” summarized under ETA s. 306.1(2).