Bill C-266

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First Reading

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C-266

First Session, Thirty-ninth Parliament,

55 Elizabeth II, 2006

HOUSE OF COMMONS OF CANADA

BILL C-266

An Act to confirm the rights of taxpayers and to establish the Office for Taxpayer Protection

first reading, May 8, 2006

NOTE

2nd Session, 39th Parliament

This bill was introduced during the First Session of the 39th Parliament. Pursuant to the Standing Orders of the House of Commons, it is deemed to have been considered and approved at all stages completed at the time of prorogation of the First Session. The number of the bill remains unchanged.

Mrs. Smith

391222

SUMMARY

The purpose of this enactment is to confirm the rights of taxpayers and provide a fairer balance in dealings between taxpayers and the Canada Revenue Agency.

It establishes an Office for Taxpayer Protection, headed by an officer of Parliament to be known as the Chief Advocate. The role of the Office is to help taxpayers assert the rights set out in this enactment.

The Income Tax Act is amended to provide, for greater certainty, that where a taxpayer has cooperated with the Minister of National Revenue and has provided a reasonable explanation, the burden of proof is on the Minister to show that tax is to be paid.

Also available on the Parliament of Canada Web Site at the following address:
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1st Session, 39th Parliament,

55 Elizabeth II, 2006

house of commons of canada

BILL C-266

An Act to confirm the rights of taxpayers and to establish the Office for Taxpayer Protection

Her Majesty, by and with the advice and consent of the Senate and House of Commons of Canada, enacts as follows:

SHORT TITLE

Short title

1. This Act may be cited as the Taxpayers’ Bill of Rights.

INTERPRETATION

Definitions

2. The definitions in this section apply in this Act.

“Agency”
« Agence »

“Agency” means the Canada Revenue Agency.

“Chief Advocate”
« Protecteur du contribuable »

“Chief Advocate” means the officer of Parliament appointed under section 5.

“Minister”
« ministre »

“Minister” means the Minister of National Revenue.

“Office”
« Office »

“Office” means the Office for Taxpayer Protection established under section 4.

“taxpayer”
« contribuable »

“taxpayer” means an individual who is or who may be required to file a return or pay tax under the Income Tax Act.

TAXPAYERS’ RIGHTS

Taxpayers’ rights

3. Every taxpayer has the right

(a) to be provided with a plain English or French version of any provision of the Income Tax Act on request to the Agency;

(b) to be given the opportunity to provide an explanation to a departmental official of a matter relating to tax liability before being subjected to an audit of the matter or a requirement to produce receipts and other records to document the matter;

(d) to receive any information in the possession of the Agency that shows or tends to show that the taxpayer may be entitled to a refund of tax paid or a reduced assessment of tax owing;

(e) to make a complaint to the Office about the conduct of any employee of the Agency and to receive an explanation of that conduct from the employee’s supervisor;

(f) to make a complaint to the Chief Advocate about the conduct of any employee of the Agency where, in the opinion of the taxpayer, the explanation received from the employee’s supervisor is not sufficient;

(g) to refuse to provide information that is not required for the administration of the Income Tax Act or any other Act of Parliament;

(h) not to have the burden of proving that tax is not payable;

(i) to appoint counsel or an agent as a representative at any meeting that deals with liability to pay tax under the Income Tax Act and to record, without notice, the proceedings of any such meeting;

(j) not to be assessed interest or a penalty on tax found to be owing unless it can be shown that the taxpayer has deliberately evaded the payment of the tax;

(k) to reasonable terms of payment of taxes owing that will not cause undue hardship to the taxpayer, where the Minister is satisfied that the taxpayer has acted in good faith;

(l) to receive the assistance of the Office in settling terms of payment that will not cause undue hardship to the taxpayer or the taxpayer’s dependants or employees, where the Minister is satisfied that the taxpayer has acted in good faith; and

(m) to receive the assistance of the Chief Advocate in the protection of the rights enumerated in paragraphs (a) to (l).

OFFICE FOR TAXPAYER PROTECTION

Office for Taxpayer Protection

4. There is hereby established an office to be known as the Office for Taxpayer Protection.

Chief Advocate

5. (1) The Governor in Council shall appoint an officer of Parliament, to be known as the Chief Advocate, to serve as director of the Office.

Appointment

(2) The Chief Advocate shall be appointed following approval of the appointment by resolution of the Senate and the House of Commons.

Term

(3) The Chief Advocate holds office during good behaviour for a term of seven years and may be removed for cause by the Governor in Council on address of the Senate and the House of Commons.

Remuneration

(4) The Chief Advocate shall be paid the remuneration set by the Governor in Council on the recommendation of the Minister.

Expenses

(5) The Chief Advocate shall be paid reasonable travel and living expenses incurred in the performance of his or her duties or functions while absent from his or her ordinary place of work.

Deputy head of department

6. (1) The Chief Advocate has the rank of a deputy head of a department of the Government of Canada and has the control and management of the Office.

Officers and employees

(2) The Chief Advocate may employ any officers or employees and may engage the services of any agents, advisors and consultants that the Chief Advocate considers necessary for the proper conduct of the work of the Office.

Payment

(3) The salaries of the officers and employees of the Office and any expenses connected with the Office shall be paid out of moneys provided by Parliament for that purpose.

Mandate

7. The mandate of the Office is

(a) to provide advice, guidance and services to taxpayers in order to help them assert their rights;

(b) to provide advice to taxpayers with respect to tax liability;

(c) to appear before the Agency on behalf of a taxpayer in cases where the Chief Advocate believes that the taxpayer’s position is correct and that the taxpayer will otherwise incur unreasonable expenses to represent that position;

(d) to make investigations and hold inquiries respecting the manner in which the Agency deals with one or more taxpayers; and

(e) to receive public comments on the oper- ation of this Act and to submit to each House of Parliament those comments, including a statement of any changes that the Office recommends.

Recommendations to the Minister

8. The Chief Advocate may make recommendations to the Minister respecting the administration of the Agency, its dealings with taxpayers and the protection of the rights of taxpayers.

Proposals re taxpayers

9. The Chief Advocate may make proposals to the Minister respecting the process to be followed to determine the tax liability of one or more taxpayers or the terms of payment of a tax liability that has been established.

Powers of Chief Advocate

10. In carrying out the duties required by this Act, the Chief Advocate has the powers of a commissioner under the Inquiries Act.

Annual report

11. (1) The Chief Advocate shall, within four months after the end of each fiscal year, submit to the Minister a report on the activities of the Office for that year.

Content

(2) The report shall include

(a) a financial statement for the Office;

(b) any recommendation made by the Chief Advocate under section 8 and the response of the Minister;

(c) without revealing the identity of any individual taxpayer, an outline of any proposal made by the Chief Advocate under section 9, including whether the proposal was accepted by the Agency; and

(d) the result of any public comments received under paragraph 7(e).

Report to be laid before Parliament

(3) The Minister shall cause a copy of the report to be laid before each House of Parliament on any of the first ten days on which that House is sitting after the Minister receives the report.

Review by a Parliamentary committee

(4) The report shall be reviewed by any committee of the House of Commons, of the Senate or of both Houses of Parliament that may be designated or established for that purpose.

DISTRIBUTION OF THIS ACT

Distribution of Act

12. Once every five years, the Minister shall distribute a copy of this Act to every taxpayer along with the tax return forms for that year.

AMENDMENT TO THE INCOME TAX ACT

13. The Income Tax Act is amended by adding the following after section 220:

Onus on the Minister

220.1 For greater certainty, in the application of this Part, the burden is on the Minister to prove that a taxpayer is liable to pay the tax that the Minister asserts is payable where,

(a) the taxpayer has cooperated fully with the Minister in providing all relevant records, documents and information that the Minister has reasonably demanded; and

(b) the taxpayer has provided a reasonable explanation of the financial transactions in issue.

Published under authority of the Speaker of the House of Commons

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Table of Contents

Cover

Summary