Lawyers exempted from mandatory disclosure regime until Charter challenge decided – Advisor.ca

An interim injunction exempting legal professionals from CRA’s new mandatory disclosure regime is closely being followed by Jack Silverson and his colleagues.

“It’s obviously just a first step, but I’m pleased that the injunction was issued so that the court can consider the broader issue,” says Jack, in an interview with Advisor.ca.

Along with dramatically lowering the threshold for what the CRA considers a reportable transaction, the new regime created a brand new category of “notifiable transactions”, requiring reporting of transactions identical or substantially similar to ones the CRA has previously identified as potentially abusive.

The point of contention for lawyers is the onus on every advisor or promoter involved in a reportable or notifiable transaction to make their own separate disclosure to the CRA rather than relying on a single report from the taxpayer. Penalties for non-compliance could rise as high as $110,000 plus the value of all fees charged.

“Now the lawyer is potentially subject to penalties as well, so they have an independent decision to make that may be at odds with their client”, says Jack. “It’s a very awkward position to put the lawyer in.”

Read the full article by author Michael McKiernan posted by Advisor.ca on November 30, 2023..