The budget gives CRA the authority to issue a notice of non-compliance to a person if the minister believes that the person has not complied with a requirement to provide assistance or information. A person who receives a notice may request in writing, within 90 days of receiving the notice, that the minister review the notice. Within 180 days of receiving the request to review the notice, the minister must confirm, vary, or vacate the notice, and must vacate the notice if the minister determines that the notice was unreasonable or that the person had already reasonably complied with the request for assistance or information. After the person receives notification of the minister’s decision, the person may apply, within 90 days, to a judge to review the minister’s decision. While a notice is outstanding, the person served with the notice is liable for a penalty of $50 for each day of non-compliance, to a maximum of $25,000.
Also, if a notice related to a taxpayer is issued to the taxpayer or to a person who does not deal at arm’s length with the taxpayer, the normal reassessment period for the relevant taxation years of the taxpayer is suspended.
In addition, the budget allows the minister to include in a requirement or notice for information or documents under the minister’s general audit power, the minister’s domestic requirement power, or the minister’s foreign-based information or document requirement power, an explicit requirement that the person provide any answers to questions, information, or documents sought by the minister be provided orally, under oath or affirmation, or by affidavit.
Further, the budget gives the minister the power to seek a compliance order from the court for the alleged failure to comply with a requirement for foreign-based information or documents. Previously, the minister had the power to seek a compliance order in relation to requests under the minister’s general audit power and domestic requirement letters, but not for requests for foreign-based information or documents.
The budget also introduces a new penalty in situations where the minister obtains a compliance order against a taxpayer. The penalty is 10 percent of the aggregate tax payable by the taxpayer for the relevant taxation years, if the tax payable for each taxation year to which the compliance order relates is $50,000 or more. Previously, the primary consequence of non-compliance with a compliance order was a contempt order.
These changes would come into force on royal assent of the enacting legislation.