Canadian Lawyer

48 A P R I L 2 0 1 9 w w w . c a n a d i a n l a w y e r m a g . c o m L E G A L R E P O R T HST stem from the fact that the complexity of the tax is underestimated and it "becomes a death trap for commercial lawyers." "Particularly in respect to GST transac- tions, they are taking a much harsher line," says Vern Krishna, counsel at TaxChambers LLP in Ottawa and a professor at the University of Ottawa. This leads to a lot more litigation, Krishna says, because of the nature of the process by which taxpay- ers are assessed on GST/HST. In an income tax matter, if the taxpayer files an objection to their assessment, 90 days must pass before they can file an appeal to the tax court. For a GST assessment, the wait is doubled — 180 days. This is coupled with another rule, by which the agency can begin collection procedures immediately, even before the matter comes before a court. In income tax matters, if an objection is filed, collection ceases until the dispute is settled. "The rules in respect to GST are much harsher and the CRA is actively and aggressively pushing assessments on that side because they can have the leverage and the advantage over the taxpayers," Krishna says. Adding to this, he says there is an "inordinate delay" between the time a taxpayer objects to an assessment and the time that the CRA responds. Back in 2016, the auditor gen- eral report criticized the CRA for taking too long to deal with income tax objections and the backlog it created. It found that the average wait was 143 days for "low-complexity objections," 431 days for "medium-complexity objections" and 896 days for "high-complexity objections." Krishna says that, in objecting to an assessment, it takes nine months to get a response from the CRA and an adminis- trative resolution can take years, during which interest is accu- mulating on a daily, compound basis. To circumvent the delay, taxpayers must take the CRA to court. "I personally have known of cases and been involved in cases that have taken 10 years to resolve," Krishna says. ". . . And in some cases, if you delay long enough as they do, the interest will exceed the amount in dispute." Biram notes that if the CRA appeals officer "allows the objection in part or in full," the taxpayer will be refunded. "The consequences are very severe for taxpayers, especially middle-income taxpayers. It costs a lot of money to fight [the] CRA, and for middle-income taxpayers, it is enormously expensive and, in many cases, frankly, middle-income taxpay- ers just give up the fight," Krishna says. "It costs a lot of money to fight for CRA, and for middle- income taxpayers, it is enormously expensive and, in many cases, frankly, middle-income taxpayers just give up the fight." Vern Krishna, TaxChambers LLP Celebrating Change Agents in Law Bronze Sponsor Media Partner THE E B O L G AND MAIL The 2019 Lexpert Zenith Awards celebrate change agents in the legal profession. You can support these achievements while networking with winners and leading members of the legal profession at an elegant Cocktail Reception and Gala Dinner in Toronto. For sponsorship opportunites, contact us at 416-649-8841 or MediaSolutions.Sales@thomsonreuters.com Date: June 18, 2019 5:30 p.m. Cocktail Reception 7:00 p.m. Gala Dinner and Awards Presentation Location: Arcadian Court, Toronto Lexpert.ca/zenith Keynote Speaker Orlando Da Silva, LSM Mental Health Advocate Senior Crown Counsel and Serious Fraud Office at Ministry of the Attorney General Untitled-2 1 2019-03-13 8:06 AM

• Cover