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ARTICLE · 01 NOVEMBER 2023

Broad Disclosure Of Accountants' Documents: Lessons From Gaudreau v. The King

In Gaudreau c. Le Roi, 2023 CCI 115* (Gaudreau), the Tax Court of Canada (the TCC) reminds taxpayers that there is no accountant-client privilege in Canada

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In Gaudreau c. Le Roi, 2023 CCI 115* (Gaudreau), the Tax Court of Canada (theTCC) reminds taxpayers that there is no accountant-client privilege in Canada, and that documents prepared by accountants may be producible to tax authorities.

Background

The dispute arose from a transaction whereby Sébastien Gaudreau (the Appellant) and other individuals disposed of their interests in an insurance company to a purchaser by way of a hybrid share/asset sale (the Transaction). The Transaction was structured so that the Appellant realized capital gains on the sale and was able to claim the capital gains exemption on the sale of his shares.1

The Canada Revenue Agency (the Minister) reassessed the Appellant to deny capital gains treatment, instead treating the proceeds as deemed dividends pursuant to subsection 84(2) of the Income Tax Act (the< strong>ITA). The Appellant appealed to the TCC.

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