Section 231.1

Subsection 231.1(1) - Inspections

Cases

Ghermezian v. Minister of National Revenue, 2023 FCA 183

The Minister applied for s. 231.7 compliance orders respecting CRA requests for various documents made pursuant to s. 231.1(1) (and s. 231.2(1)). ...

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Canada (National Revenue) v. Ghermezian, 2022 FC 236, aff'd in part 2023 FCA 183

In the context of applications by the Minister for s. 231.7 compliance orders respecting CRA requests for various documents made pursuant to s....

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Locations of other summaries Wordcount
Tax Topics - General Concepts - Evidence department manager can provide affidavit evidence on the activities of his department 125
Tax Topics - Income Tax Act - Section 231.2 - Subsection 231.2(1) presumption that CRA official was authorized, and CRA required to assess what is a reasonable notice period in light inter alia of the volume of requested material 313
Tax Topics - Income Tax Act - Section 244 - Subsection 244(5) s. 244(5) not the only means for the Minister to establish service by registered mail 130
Tax Topics - Income Tax Act - Section 231.6 - Subsection 231.6(2) burden on taxpayer to establish that the documents were not accessible from Canada before s. 231.6 can oust s. 231.1 or 231.2 113

Frank C. Smith Medicine Professional Corporation v. Canada (National Revenue), 2022 FC 29

CRA, which had been auditing the taxpayers -Dr. Smith, an orthopaedic surgeon in Hamilton, and his Canadian professional corporation (“Smith...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 231.6 - Subsection 231.6(2) it was not unreasonable for CRA to request information under s. 231.1 (not 231.6) on a Buffalo USB key 357

Friedman v. Canada (National Revenue), 2021 FCA 101

The Friedmans, a married couple, who had each received Requests for Information under s. 231.1(1) (“RFIs”) that were addressed to them...

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Locations of other summaries Wordcount
Tax Topics - General Concepts - Judicial Comity not following a decision of a fellow Federal Court judge is not reviewable error 267
Tax Topics - Other Legislation/Constitution - Charter (Constitution Act, 1982) - Section 13 allegation that ss. 231.1 and 231.7 violated the Charter lacked a factual foundation and, in any event, there was no allegation of a criminal investigation 366
Tax Topics - General Concepts - Stare Decisis stare decisis does not apply horizontally 134

Canada (National Revenue) v. Atlas Tube Canada ULC, 2018 FC 1086

The Minister sought an order pursuant to s. 231.7 requiring the respondent (“Atlas”) to provide a draft due diligence report (the...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 231.7 - Subsection 231.7(1) low threshold of relevance was met 298
Tax Topics - General Concepts - Solicitor-Client Privilege predominant purpose of due diligence report was to aid a business decision 336

Canada (National Revenue) v. Stankovic, 2018 FC 462

In 2009, the French authorities obtained the Falciani List (on which an HSBC employee in Switzerland had copied account holder information) and...

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Locations of other summaries Wordcount
Tax Topics - Other Legislation/Constitution - Charter (Constitution Act, 1982) - Section 7 use of stolen data provided by French tax authorities did not violate taxpayer's Charter rights 202
Tax Topics - General Concepts - Stare Decisis Quebec CA decision relied upon 40
Tax Topics - Income Tax Act - Section 231.7 - Subsection 231.7(1) mere suspicion of criminal activity did not oust s. 231.1 215

Campbell v. Canada (Attorney General), 2018 FC 412

The taxpayer applied to have a requirement issued to him under s. 231.1(1) set aside on the basis it was issued as part of a criminal...

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Canada (National Revenue) v. BP Canada Energy Company, 2015 DTC 5077 [at 5958], 2015 FC 714, rev'd 2017 FCA 61

Campbell J allowed the Minister's s. 231.7 application to enforce her demand for unredacted copies of its tax accrual working papers (containing...

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Piersanti v. Canada, 2014 FCA 243

The taxpayer had been convicted of over 30 GST-related offences. In the course of appealing the related reassessments, she moved, on Charter...

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Locations of other summaries Wordcount
Tax Topics - Other Legislation/Constitution - Charter (Constitution Act, 1982) - Section 8 propriety of evidence collection for criminal purposes is irrelevant to its admissibility in tax appeals 173
Tax Topics - Excise Tax Act - Section 289 propriety of evidence collection for criminal purposes is irrelevant to its admissibility in tax appeals 173

R. v. Posteraro, 2014 DTC 5040 [at 6734], 2014 BCPC 31

The accused applied to exclude evidence collected from an audit on the basis that the audit had a criminal investigation purpose. Applying the...

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R v. He, 2012 DTC 5129 [at 7234], 2012 BCCA 318

The Court affirmed the trial judge's decision to exclude evidence obtained by CRA in the course of a pilot project to evaluate the adequacy and...

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Locations of other summaries Wordcount
Tax Topics - Excise Tax Act - Section 288 - Subsection 288(1) 185

Redeemer Foundation v. Canada (National Revenue), 2008 DTC 6474, 2008 SCC 46, [2008] 2 S.C.R. 643

After the CRA served the appellant with a requirement under s. 230(3) asking that it maintain "transmittal forms" showing the identities of...

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Stanfield v. Canada (Minister of National Revenue), 2005 DTC 5454, 2005 FC 1010

After applying a range of factors Noël J. concluded that the predominant purpose of letters and questionnaires was to further a criminal...

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R. v. Dial Drugstores Ltd., 2003 DTC 5206 (Ont. Sup. Ct. J.)

An investigation by CCRA of the taxpayer was not transmuted into a criminal investigation until the auditor met with Special Investigations and...

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R. v. Ling, 2002 DTC 7566, 2002 SCC 74, [2002] 3 S.C.R. 814

CCRA was conducting an audit and not an investigation of the taxpayer up until the time of a three-hour meeting in which the taxpayer was...

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R. v. Jarvis, 2002 DTC 7547, 2002 SCC 73, [2002] 3 S.C.R. 757

Where the predominant purpose of a particular inquiry is the determination of a penal liability (e.g., under s. 239 of the Act), CCRA officials...

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Words and Phrases
enforcement

The Queen v. Norwood, 2001 DTC 5111 (FCA)

The photocopying by a Revenue Canada auditor of notes made by an accountant in his interview with the taxpayer which the auditor obtained from an...

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Locations of other summaries Wordcount
Tax Topics - Other Legislation/Constitution - Charter (Constitution Act, 1982) - Section 8 surreptitious photocopying 164

The Queen v. Kloster, 98 DTC 6258 (Prov. Ct. B.C.)

The use of s. 231.1 to obtain bank records and records of a solicitor who had acted for the accused breached the reasonable expectations of...

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Locations of other summaries Wordcount
Tax Topics - Other Legislation/Constitution - Charter (Constitution Act, 1982) - Section 8 taking of bank records breached privacy 52

The Queen v. Norway Insulation Inc., 95 DTC 5328, [1995] 2 CTC 451 (Ont. C.J. (G.D.))

After the taxpayer's file was referred to Special Investigations based on the initial auditor's suspicion that the taxpayer had not reported...

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R. v. Rosenberg, 87 DTC 5189, [1987] 1 CTC 385 (S.C.O.)

A Revenue Canada officer was authorized to examine and make copies of documents which the OPP had seized and detained pursuant to s. 446 of the...

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Lipsey v. MNR, [1984] CTC 208, 84 DTC 6191 (FCTD)

An order was granted restraining the Department from taking further steps in the investigation of the affairs of the taxpayer and specifically...

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Locations of other summaries Wordcount
Tax Topics - General Concepts - Evidence 48

See Also

Tellza Inc. v. Canada (National Revenue), 2021 FC 853

CRA issued a letter to Tellza under ETA s. 288(1) (similar to ITA s. 231.1(1)) to obtain all of Tellza’s electronic accounting data for a...

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Locations of other summaries Wordcount
Tax Topics - Excise Tax Act - Section 288 - Subsection 288(1) it was not unreasonable for CRA to exercise its audit power by requesting a copy of all electronic records for a 20-month period 287

R. v. Bouclair Inc., 2020 QCCQ 4548 (Court of Quebec)

During a routine audit of a home fashion and décor company (“Bouclair”), the ARQ discovered that Bouclair had paid for the construction of a...

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Locations of other summaries Wordcount
Tax Topics - Other Legislation/Constitution - Charter (Constitution Act, 1982) - Subsection 24(2) exclusion of evidence not a sufficient remedy to protect against breach of Jarvis protections 475

BT Céramiques Inc. v. Agence du revenu du Québec, 2020 QCCA 402

Jarvis found that where the predominant purpose of a particular inquiry is the determination of a penal liability (e.g., under s. 239 of the ITA),...

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Locations of other summaries Wordcount
Tax Topics - Other Legislation/Constitution - Charter (Constitution Act, 1982) - Section 8 CRA violated the Jarvis principle in auditing following reasonable grounds for considering that there was taxpayer/CRA criminal conduct 481
Tax Topics - Other Legislation/Constitution - Charter (Constitution Act, 1982) - Subsection 24(1) ARQ could not use documents obtained by CRA contrary to the Charter 345

R. v. BT Céramiques Inc., 2017 QCCS 4262, rev'd 2020 QCCA 402

Jarvis found that where the predominant purpose of a particular inquiry is the determination of a penal liability (e.g., under s. 239 of the ITA),...

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Locations of other summaries Wordcount
Tax Topics - Other Legislation/Constitution - Charter (Constitution Act, 1982) - Section 8 mere suspicion of tax evasion and corrupting CRA officials is insufficient to invalidate audit information 547

R v. Lombardo, 2011 DTC 5065 [at 5733] (B.C. Prov. Ct.)

The audit division of CRA commenced an audit of the accused after a leader in the CRA special enforcement division brought to their attention a...

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Mommersteeg and Giffen v. The Queen, 96 DTC 1011, [1995] 2 CTC 2767 (TCC)

A polite oral request made to a travel agency by a Revenue Canada auditor for access to their frequent flyer program records did not contain the...

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O'Reilly v. Commissioners of the State Bank of Victoria (No.2), 83 ATC 4156 (HC)

S.263 of the Income Tax Assessment Act 1936, which provided that a revenue officer "shall at all times have full and free access to all buildings,...

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Administrative Policy

7 October 2020 APFF Roundtable Q. 2, 2020-0852141C6 F - APFF 2020 Roundtable Q2 - Request for Information

In responding to a question as to where and why bank and credit card statements are required in CRA’s audits of individuals and shareholders,...

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27 February 2019 CTF Corporate Management Tax Conference, Q.7

Although s. 231.1 uses the word “any,” judges have imposed a reasonableness test.

CRA decided not to appeal the BP decision to the Supreme...

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27 November 2018 CTF Roundtable Q. 11, 2018-0779971C6 - Record Retention Policy Guideline

What is CRA’s approach to requesting taxpayer records, particularly a taxpayer’s analysis of its tax risks, and is CRA updating its published...

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Locations of other summaries Wordcount
Tax Topics - General Concepts - Solicitor-Client Privilege solicitor-client privilege does not extend to list of uncertain tax positions 117

24 May 2018 CTF Seminar - Preventing, Navigating, and Resolving Tax Disputes under “Managing Tax Risk, The Ins and Outs of Reporting and Compliance” (Gordon Parr)

Gordon Parr (Director) indicated that, partly in response to the BP decision, CRA is currently updating its internal communiqué with respect to...

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23 February 2016 Toronto Centre Tax Professionals Seminar under “Access to Accountants' Working Papers”

In request for comments on the BP case and CRA’s policies respecting seeking access to the working papers of accounting firms, CRA stated...

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3 November 2003 Internal T.I. 2003-0044817 F - Copies of Electronic Documents

In the course of an audit, a taxpayer carrying on a business refused to hand over diskettes containing text files of accounting data to the...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 231.5 - Subsection 231.5(1) CCRA audit right to take electronic copies and to print out 247

90 C.R. - Q62

It is RC's general practice to request accountants to produce specific working papers for examination where they can reasonably be considered an...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 231.2 47

86 C.R. - Q.29

Documents potentially covered by s. 231.1(1) include internal auditor reports and accountants' working papers.

81 C.R. - Q10

Where the auditors' working papers contain closing or balancing adjustments that are relevant to the tax returns, these working papers are...

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79 C.R. - Q34

RC does not routinely request audit files from accountants for inspection.

Paragraph 231.1(1)(a)

Cases

Canada (National Revenue) v. Miller, 2021 FC 851

Mr. Miller was a businessman who engaged in consulting work for clients and companies looking to raise funds to access the Canadian public...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 231.7 - Subsection 231.7(1) s. 231.7 compliance order for a description of the terms of an oral contract 310

Canada (National Revenue) v. Lin, 2019 FC 646

Three individuals whom CRA suspected of not disclosing offshore assets received letters requesting the filing of T1135s and requesting...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 231.7 - Subsection 231.7(1) CRA request for an information-request compliance order dismissed because it was unclear which entities were covered 386

Canada (National Revenue) v. Cameco Corporation, 2019 FCA 67

The respondent (“Cameco”) had appealed transfer-pricing assessments to the Tax Court. CRA then audited subsequent years, where essentially the...

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Words and Phrases
audit
Locations of other summaries Wordcount
Tax Topics - Statutory Interpretation - Ejusdem Generis 3rd word in phrase was limited by focus on other 2 words 138
Tax Topics - Statutory Interpretation - Redundancy/reading in words CRA’s broad interpretation of s. 231.1(1)(a) would render s. 231.1(1)(d) redundant 172
Tax Topics - Statutory Interpretation - Interpretation Act - Subsection 45(2) interpretation informed by legislative amendment narrowing the wording 58

Administrative Policy

31 May 2019, Statement from the Canada Revenue Agency regarding the decision in Canada (National Revenue) v. Cameco Corporation (2019 FCA 67), CRA Webpage

After noting that it will not seek to appeal Cameco, CRA indicated that this case decided:

[T]he Minister … does not have the authority to...

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27 March 2019 CTF Seminar - Transfer Pricing

BP is not a complete bar to access tax accrual working papers, as indicated by Atlas. The Communiqué contemplates reasonableness and restraint....

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 247 - New - Subsection 247(10) downward-adjustment requests reviewed for whether there is double non-taxation 115
Tax Topics - Income Tax Act - Section 247 - New - Subsection 247(2) - Paragraph 247(2)(d) 3-step process before s. 247(2)(d) is applied 175
Tax Topics - Income Tax Act - Section 233.8 - Subsection 233.8(3) use of CbC reports for assessing risk 36

AD-19-02 Obtaining Information for Audit Purposes 2019-03-21

Pending decision in Cameco

Pending a final decision in this case, CRA officials can continue to have oral discussions with taxpayers and can...

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Paragraph 231.1(1)(d)

Cases

Canada (National Revenue) v. Cameco Corporation, 2017 FC 763, aff'd 2019 FCA 67

In the course of doing a transfer-pricing audit of the 2010-2012 taxation years of the respondent (“Cameco”), the Minister demanded in-person...

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Locations of other summaries Wordcount
Tax Topics - Other Legislation/Constitution - Federal - Tax Court of Canada Rules (General Procedure) - Section 95 - Subsection 95(1) unfettered CRA interview right would undercut Rules and proportionality principle 262
Tax Topics - Statutory Interpretation - Redundancy/reading in words presumption against tautology 71

BP Canada Energy Company v. Canada (National Revenue), 2017 FCA 61

In order to explain the numerical derivation of an amount being reviewed by CRA on its audit of the taxpayer, the taxpayer provided redacted...

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Locations of other summaries Wordcount
Tax Topics - Statutory Interpretation - Interpretation Act - Section 8.1 federal power should be exercised harmoniously with provincial law 212

See Also

Jimenez, R. (On the Application of) v The First Tier Tribunal (Tax Chamber), [2019] EWCA Civ 51

The taxpayer was a UK national who had formerly resided in the U.K. and was now resident in Dubai. In connection with its investigation of his...

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Locations of other summaries Wordcount
Tax Topics - Statutory Interpretation - Territorial Limits a demand for information issued to a former UK resident was valid 392

Administrative Policy

20 November 2017 CTF Annual Conference - CRA Panel on Issues in the Administration and Enforcement of the ITA, Q.12

In Cameco, the Court dismissed CRA’s application to question 25 corporate employees in the course of an audit, noting that this would...

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20 November 2017 CTF Annual Conference - CRA Panel on Issues in the Administration and Enforcement of the ITA, Q.11

What is the CRA’s policy on tax accrual working papers and its response to BP Canada?

CRA noted that its focus is in determining what taxpayers...

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Subsection 233.1(2)

Administrative Policy

7 October 2016 APFF Roundtable Q. 1C, 2016-0652771C6 F - T106 and multiple year ends

Will CRA accept a single form T106 for the period of 12 months ending on December 31, 2016 if that period consists of a taxation year ending on...

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Subsection 231.1(3) - Application

Cases

R. v. Baudais, 2014 DTC 5071 [at 6973], 2014 BCSC 856

The accused argued that it was inappropriate for CRA to obtain a search warrant under s. 487 of the Criminal Code in respect of suspected offences...

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Locations of other summaries Wordcount
Tax Topics - Statutory Interpretation - Other/Conflicting Statutes CRA could obtain warrants under Criminal Code rather than tax statutes 106

A.G. (Canada) v. Pica, 86 DTC 6001, [1986] 1 CTC 155 (Ont CA)

The seizure of 48 boxes of documents pursuant to s. 231(1)(d) was permissible given the complexity of the taxpayer's affairs. To insist that in...

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The Queen v. Dzagic, 85 DTC 5252, [1985] 1 CTC 346 (S.C.O.), rev'd 86 DTC 6432, [1986] 2 CTC 288 (Ont CA)

S.231(1)(d) is ultra vires by virtue of s. 8 of the Charter because it permits seizure in advance of any judicial authorization. "The argument...

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New Garden Restaurant and Tavern Ltd. v. MNR, 83 DTC 5338, [1983] CTC 332 (SCO)

The procedure contemplated by S.231(1)(d) should not be regarded as interfering with the types of privacy interests protected by S.8 of the...

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Royal Craft Products Ltd. v. The Queen, 80 DTC 6143, [1980] CTC 97 (Alta. C.A.)

It was indicated, obiter, that S.231(1)(d) "embraces all the documents required to be retained by a taxpayer under S.230", rather than being...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 231.3 - Subsection 231.3(3) 50

In re Usarco Ltd., 80 DTC 6085, [1980] CTC 145 (Ont CA)

It was stated, obiter, that it is immaterial that there is a time lag between the noting of the violation and the seizure.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 231.3 - Subsection 231.3(7) 114

Subsection 231.1(4)

See Also

Delzotto v. The Queen, 95 DTC 5518, [1995] 2 CTC 298 (FCTD)

Before going on to find that there was insufficient evidence of a material change in circumstances (i.e., insufficient evidence that a proposed...

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