What is CRA’s approach to requesting taxpayer records, particularly a taxpayer’s analysis of its tax risks, and is CRA updating its published position?
CRA indicated that it can seek the production of tax accrual working papers, provided that the request for such records is relevant to specific risks or items under audit, and it uses restraint in seeking the information. Factors that may be considered are the taxpayer’s past level of compliance and the existence of large unexplained tax reserves.
While CRA officials may, in certain circumstances, request a list of what the taxpayer considers to be its uncertain tax positions, CRA officials should first perform research and analysis in forming the basis of their reassessment. Provided all relevant facts and transactions are included in the taxpayer’s uncertain tax positions, exclusions of the related advice and analysis may be accommodated. Where the criteria in the revised Communiqué (which will be posted on the Canada website) are met, CRA retains the right to certain tax positions as outlined in Atlas Tube. CRA recognizes the principle in BP that taxpayers are not required to self-audit.