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Federal Court of Appeal Overturns Guindon Decision of Tax Court of Canada

We previously wrote about the Tax Court of Canada decision released on October 2, 2012, Guindon v. R., 2012 TCC 287 (“Guindon”).  The Guindon decision had dramatic implications for any Canadians who were assessed third party penalties pursuant to section 163.2 of the Income Tax Act (the “Tax Act”).  The decision found that the penalties were, in substance, criminal penalties.  This finding had far reaching implications for administration of section 163.2 with respect to:

  1. the applicable standard of proof;
  2. section 11 Charter of Rights and Freedoms protections for those accused; and
  3. restriction on the information gathering power of the Canada Revenue Agency in the admininstration of these penalties.

The Crown appealed the Tax Court decision to the Federal Court of Appeal and the judgement of the Tax Court of Canada was overturned in Canada v. Guindon, 2013 FCA 153.

Among other findings, the Federal Court of Appeal found the penalties are administrative as opposed to criminal penalties.

The full text of the Federal Court of Appeal decision can be found here: http://decisions.fca-caf.gc.ca/site/fca-caf/decisions/en/item/37806/index.do?r=AAAAAQAHZ3VpbmRvbgAAAAAAAAE.

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