Be Careful what you agree to or sign

If it is not common knowledge please consider yourself warned.  DO NOT go up against the CRA by yourself.  Further, whatever you do, don’t sign anything without consulting a professional.  In the Court case excerpt below you will see that the Taxpayer (I say that because they are not a client) signed a waiver form agreeing to not appeal or object, because they negotiated a settlement with the CRA.  I can’t speak to the agreement, but the fact that the Taxpayer chose to appeal anyway leads me to believe that they had second thoughts after agreeing to the settlement.  From reading the case you will see that the CRA sought to have the appeal overturned due to the fact that a waiver had been signed.  You will also note that the CRA won. 

The issue plain and simply is one of procedure and law.  This has nothing to do with being fair, although I would argue that if the settlement was fair the Taxpayer probably would not have appealed.  My guess is that he was backed into a corner and told take the deal, but afterwards consulted someone who told him he could do better, or maybe that he wasn’t treated fairly.  Truth is I don’t know.  The other truth is that the CRA will use whatever legal means are available to them.  If you agree to something and sign they will try to hold you to it regardless of fairness.

Consider yourself warned.  DO NOT GO UP AGAINST CRA BY YOURSELF


Document Excerpt:
Noran West Developments Ltd v The Queen Tax Court of Canada (General Procedure), December 12, 2012 Neutral Cite: 2012 TCC 434. Court File No. 2011-2274 (IT)G Paris, J. Federal Income Tax - Waiver signed by taxpayer- Motion to quash appeal- The respondent was seeking an order quashing the taxpayer's appeal from a reassessment on the basis that a waiver signed by the taxpayer precluded it from appealing. The taxpayer was a real estate developer who entered into a joint venture to buy land and build condominium units. The appeal concerned units that had been transferred to the taxpayer and its sole shareholder, Raymond Ayers. An audit found that the taxpayer under-reported its share of joint venture income arising from a non-arm's-length transfer of units to the taxpayer and Ayers, and assessments were issued to reflect that. After filing a notice of objection, settlement discussions resulted in an agreement to reduce the amount of unreported income and gross negligence penalties. The taxpayer signed a waiver agreeing not to object or appeal. The taxpayer appealed the assessments arising from the waiver agreement. The taxpayer's objections to the waiver were without merit. The waiver was in writing, the matters it dealt with were clear, there were no mistakes that invalidated the waiver and it was not unconscionable. The respondent's motion was granted- ITA, ss. 163(2), 169(2.2); Tax Court of Canada Act, s. 12; Tax Court of Canada Rules (General Procedure), s. 58(3).  
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The above excerpt is from CCH reporting service to which I subscribe and is a Tax Court of  Canada case.  The Respondent is the CRA.