Oral Agreements Worth More Than The Paper They're Written On

The Federal Court recently ruled that taxpayers may be required to disclose descriptions of records that should have been kept by the taxpayer, including oral contracts and invoices, when audited by the Canada Revenue Agency (the "CRA").

In Canada (Minister of National Revenue) v Miller, the Federal Court held that the CRA can compel a taxpayer to provide an account of the terms and conditions of a business relationship, the services rendered and the amounts invoiced when such items have not been committed to writing by the taxpayer.¹ The Court further held that taxpayers are required to put forth reasonable efforts to obtain copies of certain documents that are not in their possession in response to requests made during a CRA audit.