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The Thelwell case, recently decided by Boyle J. of the Tax Court
of Canada ("TCC"), should caution
taxpayers to be careful when seeking tax advisory and dispute
resolution services. Boyle J. excoriated both the Thelwells'
tax preparer / advisor, Rudolfo Terracina, and the agent who
represented them before the TCC, Peter Tindall. It is an open
question whether the Thelwells could have succeeded in their TCC
appeals, but; Boyle J.'s comments suggest that they may not
have been helped by their advisors.
The substance of the case was straightforward. The Thelwells
operated a courier service. In 2007, they engaged Mr. Terracina to
help with their tax filings. Mr. Terracina operated a tax
preparation and advisory service under the name "Doctor
Tax". Apparently, the Thelwells were unaware that he had
previously pled guilty to tax evasion and been sentenced to three
years in federal prison in connection with fraudulently prepared
tax returns on behalf of his clients.In Boyle J.'s words, Mr.
Terracina was using the term "Doctor... as a verb, not a
title" and he "appear[ed] to have returned to his old
ways... just because one holds oneself out as a tax professional
does not make it so".
Boyle J. also minced no words in relation to Peter Tindall, the
agent who represented the Thelwells in their TCC appeal, commenting
that he compounded the Thelwells' predicament. According to
Boyle J., Mr. Tindall did not seem to understand basic principles
of litigation before the TCC, and that he did not have "any
legal or paralegal training, experience or status [and] [h]is
previous employment was in an unrelated area."
Further, Boyle J. stated pointedly that "Canadians are free
to choose whomever they wish to represent them in informal tax
appeals, and the right to choose includes the right to make poor
choices. Unfortunately for the Thelwells, apparently as a result of
their choice, there has been entirely insufficient evidence to
allow me to conclude... that the underlying expenses were even
incurred". He then observed that the Thelwells were not
entirely blameless, since they chose the advisors whose approach
led to the failed appeals to the TCC.
The Thelwell case is obviously a sobering and cautionary tale.
The moral of the story may be that saving money on tax advice can
be costly in the long run.
*Thelwell v. The Queen, 2012 TCC 185 (Informal
Procedure) ("Thelwell").
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Today (May 2, 2013), Ontario Finance Minister, Charles Sousa tabled the province’s 2013 Budget. This year’s budget, titled "A Prosperous and Fair Ontario" is committed to eliminating the deficit by 2017-18 and then reducing the net debt-to-GDP ratio to the pre-recession level of 27%.
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Canada’s 2013 federal budget released on March 21, 2013 introduces a number of measures to strengthen the ability of the Canada Revenue Agency to address international aggressive tax avoidance and to combat international tax evasion so as to maintain and protect Canada’s tax base.
Tax Communiqué: Highlights From The Budget 2013 (Video Content)
