Getting And Giving Third Party Taxpayer Information

The Canadian income tax system is based on the principles of self-reporting and self-assessment. At first instance, the government does not have sufficient information to determine each person’s income or tax. Accordingly, taxpayers are trusted to report their own income for each year. In order to ensure accuracy of returns, the Canada Customs and Revenue Agency ("CCRA") is given broad powers to audit taxpayers’ books and records and obtain other information.

To encourage honesty and integrity in filing returns, the Income Tax Act (the "Act") makes it a criminal offence for CCRA officials to disclose any taxpayer information which has been obtained under the Act. In some cases, CCRA may find it useful to obtain information about a taxpayer from third party sources. By the same token, taxpayers may wish to see what information CCRA has from third parties which may be relevant to the taxpayer’s own affairs. Some of the implications of this are discussed below.