Digests

Income tax

Practice

Judicial review of Canada Revenue Agency decision denying voluntary disclosure request because not voluntary—Applicant president of Allianz Madvac inc.—During two taxation years, Allianz deducted certain expenses from its business income being Applicant’s personal expenses—Allianz subject of general audit by Agency—Voluntary Disclosures Program (VDP) established under Income Tax Act, R.S.C., 1985 (5th Supp), c. 1, s. 220(3.1)—Spirit of VDP to encourage compliance with Income Tax Act by allowing taxpayers who have not met all tax obligations under Act to bring tax status into conformity and avoid penalties or criminal proceedings—Taxpayers may access program if taxpayers take initiative to disclose—Agency published circular setting out eligibility conditions for VDP—Agency also published internal guidelines—Guidelines not interpretive tools in themselves and do not create law—Act, and more specifically s. 220(3.1), grants Minister discretion and guidelines cannot fetter discretion granted by Act to discretion holder—Despite difference in wording between circular and guidelines, consequence not to fetter exercise of discretion—Close connection between Agency’s contact with Allianz employee and applicant’s voluntary disclosure request made subsequently—Court had to decide whether Minister considered all evidence before him fairly—In light of facts and evidence submitted, reasonable for Agency to deny applicant’s voluntary disclosure request—Application dismissed.

Charky v. Canada (Attorney General) (T-193-10, 2010 FC 1327, Boivin J., judgment dated December 23, 2010, 15 pp.)