This Taxmemo describes the Canada Revenue
Agency's (CRA's) policy on taxpayer access to CRA audit
reports and other documents that support the issuance of a proposal
letter. It suggests what to do if an auditor is reluctant to
provide this information.
Information a CRA auditor used to create or support positions
taken in a proposal letter must be made available to you upon an
informal request, at the time the proposal letter is issued. This
information can help you understand the basis of the proposal and
the factual assumptions relied on by the auditor, especially when
the basis is not adequately outlined in the proposal letter.
We understand that, in some cases, CRA auditors are reluctant to
provide this information and refer taxpayers to the formal request
process under the Access to Information Act (ATIA). Formal
requests under the ATIA should be made only as a last resort,
because they often involve significant delays, which can prevent
the information from being available by the deadline for you to
make representations to the proposal.
CRA's stated policy: Early disclosure of
CRA Audit Manual Chapter 3.4.7 – "Informal
Request for Information" states that "Information may be
disclosed when requested informally after a proposal letter is
issued..." Examples of information that can be released under
an informal request are:
the Auditor's Report;
correspondence and internal memoranda, appropriately severed
related correspondence with headquarters (e.g., technical
interpretation requests or opinions and referrals to specialized
sections relating to a specific person);
audit working papers, excluding third-party information, leads,
disclosure of audit techniques and information from informants;
related reports from CRA valuators, appraisers, Electronic
Commerce Audit Specialists, science advisers, external
consultants' appraisals and reports.
The CRA will review all documents before their release to sever
information related to third parties or information subject to
solicitor-client privilege. It will also exclude any information
that may reasonably be expected to cause injury if disclosed or
that may restrict the CRA's ability to administer the
Excise Tax Act or Income Tax Act. Notwithstanding
these exclusions, an informal request should provide valuable
information that will assist in the preparation of representations
to the CRA proposal.
Informal request for information is refused or delayed:
What to do
If a CRA auditor is reluctant to respond to informal requests
for audit information made at the proposal stage or flatly refuses
to provide this information, we suggest that the auditor be
reminded or advised that:
The CRA Audit manual provides for informal requests for
information after a proposal letter has been issued (CRA Audit
Manual Chapter 3.4.7). The CRA recently re-emphasized this policy
at the Canadian Tax Foundation (CTF) conference on Tax Dispute
Resolution, Compliance, and Administration in Canada (June
The CRA has acknowledged that the ATIA and the Privacy
Act were intended to complement and not replace existing
procedures for access to government and personal information. The
CRA has also indicated that, in cases when an informal request has
been made within CRA stated guidelines, a formal request has no
added value to the CRA or the requester.1 Therefore, a
refusal to provide this information is inconsistent with the
CRA's policy of transparency and fairness.
Unless a satisfactory resolution to, or explanation for, the
refusal is obtained, you will take the matter up through the levels
of the dispute resolution process (Team Leader, Audit Manager,
Assistant Director-Audit), as suggested by the CRA at the CTF
conference on Tax Dispute Resolution, Compliance, and
Administration in Canada – Access to Information During
Tax Audit (June 2012).
In addition, if the information is needed to fully understand
the basis of the proposal, you can request that the deadline to
provide representations to the proposal be extended until the
information requested is provided.
1. CRA Document 2011-0403751C6 "2011 STEP
Conference-Q8– Access to Information," June 2-3,
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
Specific Questions relating to this article should be addressed directly to the author.
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