Tax Court of Canada Launches Pilot Project to Reduce Costs and Delays of Tax Appeals
Beginning in September 2019, the Tax Court of Canada (the “Court”) will begin a pilot project in Toronto and Vancouver that will attempt to reduce delays and provide a faster, more cost-effective procedure in obtaining a preliminary ruling from the Court.
The project is called the “Preliminary Ruling Docket” and was announced in March 2019. The project will run for six to nine months, though further information will be released in the coming months.
While the rules have not fully been announced, and the court will be evaluating the project as it runs to see if any changes are required, some preliminary information has been released.
The project will be available for resolving tax appeals where the amounts in dispute range from $25,000 to $300,000 for each taxation year.
The parties to the dispute can apply on joint consent to be part of the project. The application must be made within 90 days from the close of pleadings. It would be up to the Court’s discretion as to whether each specific case is deemed appropriate to be dealt with through the pilot project.
As part of the attempt to provide a more expeditious process, hearings would be limited to two days. Additionally, some of the normal procedural rules would not apply; for instance, there would be no discovery or documentation production and no experts would be allowed, except in rare circumstances. Instead, parties must submit pre-hearing briefs which may be no longer than 20 pages and must be presented 30 days before the hearing. Any documents relied upon must be produced in the same time limit or they will not be allowed as part of the preliminary hearing. Oral evidence may be provided at the hearings.
The preliminary ruling issued under the project will consider questions of fact or of mixed fact and law and will be issued within 60 days of the hearing. Interestingly, the findings will not be binding on the parties. This means that the parties may accept the ruling or refuse it. Parties will have 30 days to make this decision in writing.
If the parties agree to be bound by the ruling, it will become a consent judgment by the Court with no costs awarded. However, if the parties choose not to be bound by the ruling, the case will proceed under the normal general procedure and the preliminary ruling will remain sealed. Despite the ruling being sealed, the judge who proceeds to hear the case may consider it as an offer of settlement in the Court’s considerations.
Given that some tax procedures before the Court can take over a year to schedule in a number of places, this pilot project may be of interest to those dealing with a tax dispute that qualifies for the project.
Mark Feigenbaum brings together many years of litigation experience with a deep knowledge of tax law, corporate law, accounting, finance, and other related practice areas. Mark can help you avoid the biggest risks that may arise in tax disputes.
Prior to founding his law firm, Mark worked in the cross-border tax department of an international Big 4 firm, and held accounting management positions across a variety of sectors in both Canada and the United States.
With tax legislation in constant flux on both sides of the border, Mark takes great care to stay current on all relevant developments in law and policy. He carefully considers all solutions available to craft a response that proactively considers the policies and best practices of a given tax authority.
If you are involved in a tax dispute or related litigation, contact Mark Feigenbaum for exceptional representation and guidance. Mark’s many years of interdisciplinary knowledge in law, tax, accounting, and finance and significant cross-border experience make him uniquely positioned to assist you. Mark offers services to clients in the U.S., Canada and around the world. Contact Mark online or call him at (905) 695-1269 or toll-free at (877) 275-4792 to book a consultation