After the taxpayer's U.S. parent (TeleTech US) determined that it had undercharged the taxpayer for administrative services provided in 2000-2002, TeleTech US filed amended returns with the IRS to increase its taxable income for those years, and the taxpayer requested CRA (on May 5, 2004) to make a corresponding downward adjustments for those years - which was withdrawn in March 2006 in order to clear the way for a request made of CRA (on May 11, 2006) under Art. IX of the Treaty for relief from double taxation, along with a similar request to the IRS. CRA denied the request in November 2006 as neither CRA nor the IRS (as contrasted with the taxpayers) had taken any action that resulted in taxation not in accordance with the Treaty.
CRA was informed by the IRS in December 2006 that TeleTech US's amended 2000-2002 returns had been assessed as filed and was invited to participate in a mutual agreement procedure under Art. 26. CRA did not respond, or inform the taxpayer of this letter.
Following an IRS audit of TeleTech US's amended returns, in July 2008 the IRS disallowed all of the increased income adjustment for 2000, and allowed only U.S.$11.2 million of the requested upward income adjustments for 2001 and 2002. However, the taxpayer did not renew its request with CRA for competent authority assistance until December 2009.
Following the CRA's denial of this request on June 9, 2011, the taxpayer applied for an order of mandamus to compel CRA to accept its "continuing" application for competent authority consideration under Art. IX and to submit the matter to arbitration under Art. XXVI.
MacTavish J found that CRA's denials on November 10, 2006 and June 9, 2011 of the taxpayer's application were clearly decisions which could only have been challenged by an application for judicial review made within 30 days thereafter (as required under s. 18.1(2) of the Federal Courts Act), which was not done (paras. 48, 50) - and the taxpayer's argument that CRA erred in requiring that there be government action before competent authority proceedings could be engaged represented an impermissible collateral attack on the first decision (paras. 55-56). As for the taxpayer's request, which was for an order of mandamus, she stated (at para. 61) "the Courts will not generally make an order of mandamus to compel a decision maker to make a particular decision where the decision-making power is discretionary."
Finally, the taxpayer's argument, that it was unreasonable for CRA to state that the taxpayer's second application to it was not timely in light of its not responding after receiving the IRS letter in December 2006 letter, also represented an impermissible collateral attack on the CRA's second decision (para. 72).