Tax Court: CRA Worker Might Not Testify as Expert

Tax Court: CRA Worker Might Not Testify as Expert

Tax Court: CRA Worker Might Not Testify as Expert

[author: Jacob Yau]

In HLP Solution Corporation. v. The Queen (2015 TCC 41 ) the Tax Court held that the CRA worker lacked the required impartiality to testify being an expert witness due to her prior participation in auditing the citizen.


The citizen would be a software company that claimed Research and Experimental Development (SR&Erectile dysfunction) tax credits for that 2009 taxation year. The CRA reassessed to deny the SR&Erectile dysfunction credit claims.

Within the Tax Court, the citizen challenged the qualification from the CRA’s expert witness because that they was without the required impartiality to testify being an expert witness within the appeal. The Tax Court held a voir dire to find out if the Crown’s suggested expert witness could testify within the appeal.

The suggested expert witness held a doctoral in information technology and it was employed using the CRA like a Research and Technology Consultant (RTA). The taxpayer’s allegation of impartiality wasn’t in line with the proven fact that the suggested expert witness was employed using the CRA. Rather, the citizen contended it had become the suggested expert witness’s participation in each and every stage from the file that impugned her impartiality.

The Crown posted that it’s rare for any court to won’t hear the testimony of the expert witness, which there has to be obvious proof of bias, which, based on the Crown, wasn’t contained in this situation. Furthermore, the Crown posted it had become within the capacity being an expert the opinion was handed, regardless of whether this happened in the audit stage, objection stage, or during appeal.


In analyzing whether or not to admit evidence through the Crown’s witness, the Tax Court reviewed the key situation around the admission of expert evidence, the final Court of Canada decision R. v. Mohan ([1994] 2 SCR 9), where the Court put down the factors for figuring out whether expert evidence ought to be accepted, namely: relevance, necessity in aiding the trier of fact, the lack of an exclusionary rule, along with a correctly qualified expert.

In Mohan, the final Court revealed that the issue of relevancy is really a threshold requirement of the admission of expert evidence along with a matter to become made the decision through the judge like a question of law. There must first be logical relevance to ensure that evidence to become accepted. The judge must then execute a cost-benefit analysis to find out whether the need for the testimony may be worth the expense, meaning of their effect on the trial process.

The Tax Court also reviewed R. v. Abbey (2009 ONCA 624), where the Ontario Court of Appeal applied Mohan but additionally distinguished between your preconditions to admissibility and also the judge’s role like a gatekeeper. The Ontario Court of Appeal noted that although the inquiry in to the preconditions to admissibility is really a rules-based analysis that has a tendency to yield “yes” or “no” solutions, the gatekeeper function doesn’t involve the use of vibrant line rules and sometimes necessitates the exercise of judicial discretion. The gatekeeper function is much more subtle and involves weighing the advantages of the probative worth of evidence from the prejudice connected with acknowledging evidence.

In HLP, the Tax Court held it had become more suitable to disqualify the expert in the qualification stage. A Legal Court based its conclusions on most of the taxpayer’s allegations, such as the following:

the suggested expert witness was associated with the audit and objection

the suggested expert witness delivered the opinion (the technical review report) that offered because the foundation for the assessment

following a taxpayer’s representations, the suggested expert witness also authored an addendum towards the technical review report by which she maintained exactly the same position

the suggested expert witness took part in every ending up in the citizen because the CRA’s representative

the suggested expert witness confused her role being an RTA with this being an expert witness and

the suggested expert witness reproduced word-for-word sentences from her technical review report.

The Tax Court was careful to notice that it hadn’t been disqualifying the expert based on her employment using the CRA but instead based on her close participation through the audit and objection stages from the file.

The Tax Court permitted the Crown to submit a brand new expert report.

The Tax Court’s decision in HLP have a direct effect on future cases by which suggested expert witnesses were active in the audit and objection processes as CRA employees. Such employees – though they’ve already the needed professional qualifications to testify being an expert witness – can’t be qualified as expert witnesses simply because they don’t have the necessary impartiality to testify.




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Comments ( 4 )
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