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ARTICLE · 24 JULY 2026

Ignoring CRA Could Lead To Jail!

Millar Kreklewetz
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A Federal Court case demonstrates the severe consequences of ignoring Canada Revenue Agency Requests for Information during tax audits. When a landscaping corporation and its principal failed to comply with a court-ordered production of financial documents, they faced substantial fines and a 30-day jail threat, highlighting the critical importance of proper RFI compliance with guidance from experienced tax counsel.

CanadaTax
John Bassindale
John Bassindale
Isaac Thompson
Isaac Thompson

COURT ISSUES 30-DAY JAIL THREAT TO TAXPAYER FOR NONCOMPLIANCE

We have previously written about Requests for Information ("RFI") issued to taxpayers under audit by the Canada Revenue Agency ("CRA") – and the importance of complying with CRA RFIs, with assistance from Experienced Tax Counsel.

If an RFI is not complied with, the CRA can obtain a Court order (a "Compliance Order") to force the taxpayer to produce the requested information. The recent Federal Court ("FC") case Minister of National Revenue v. 1718743 Ontario Incorporated, 2026 FC 435 ("Sanderson") demonstrates that refusing to comply with an RFI, and then with a Compliance Order, is contempt of court, which can lead to heavy fines and even potential jail time!

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