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Bill C-411

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2nd Session, 36th Parliament,
48 Elizabeth II, 1999

The House of Commons of Canada

BILL C-411

An Act to confirm the rights of taxpayers and 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

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

Definitions

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

``Chief Advocate''
« avocat-cons eil en chef »

``Chief Advocate'' means the officer appointed pursuant to section 5.

``Committee''
« comité »

``Committee'' means the Standing Committee of the House of Commons appointed to deal with matters related to national revenue.

``Depart-
ment''
« ministère »

``Department'' means the Department of National Revenue.

``Minister''
« ministre »

``Minister'' means the Minister of National Revenue.

``Office''
« Bureau »

``Office'' means the Office for Taxpayer Protection established pursuant to section 4.

``taxpayer''
« contribuabl e »

``taxpayer'' means an individual who is or who may be liable to file a return or pay tax under the Income Tax Act.

Taxpayers' rights

3. It is hereby declared that 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 Department;

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

    (c) to have assessments, appeals and other procedures related to tax liability dealt with expeditiously;

    (d) to receive any information in the possession of the Department 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 confidentiality of all information provided by or respecting the taxpayer to the Department, except as may be necessary for the administration of the Income Tax Act, and authorized by law;

    (f) to complain about the conduct of or a communication from any employee of the Department and to receive an explanation of it from the employee's supervisor, and if necessary, to complain further to the Chief Advocate;

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

    (h) not to bear the onus 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 the taxpayer has deliberately evaded the payment of the tax;

    (k) in cases where the taxpayer has acted in good faith, to reasonable, negotiated terms of payment of taxes owing so as to avoid undue hardship;

    (l) in cases where the taxpayer has acted in good faith, to receive the assistance of the Office in settling terms of payment so as to avoid undue hardship to the taxpayer and the taxpayer's dependants and employees;

    (m) to be subjected to steps to recover tax owing, including the seizure of property or freezing of assets, only if it is first shown that such steps are necessary to ensure payment of taxes owing, and to have the steps taken in a manner that protects the interests of the taxpayer's dependants and employees; and

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

Office for Taxpayer Protection

4. (1) There is hereby established an office to be known as the Office for Taxpayer Protection, of which the head shall be the Chief Advocate.

Not agent of Crown

(2) The Office is not an agent of Her Majesty.

Chief Advocate

5. (1) There shall be appointed as an officer of Parliament, an officer to be known as the Chief Advocate, as Director of the Office of Taxpayer Protection.

Appointment

(2) The Chief Advocate shall be appointed by the Governor in Council following a resolution of the Senate and House of Commons.

Nominated by 2/3 of Committee

(3) The Chief Advocate must be a person nominated to the House of Commons by the Committee following approval by a vote of no less than two thirds of the Committee.

Term

(4) The Chief Advocate holds office for a term of seven years.

Removal

(5) The Chief Advocate may be removed for cause on resolution of both Houses of Parliament.

Remunera-
tion and expenses

(6) The Chief Advocate shall receive such remuneration and reimbursement of expenses as is provided by order of the Governor in Council on the recommendation of the Minister.

Committee recommenda-
tions

(7) In making a recommendation for the purposes of subsection (6), the Minister shall consider any report of the Committee on the matter, as concurred in by the House of Commons.

Function and administra-
tion of the Office

6. (1) The function of the Office is

    (a) to assist and advise taxpayers to enable them to hold and enforce the rights enumerated in section 3;

    (b) to assist and provide representation or counsel for taxpayers in the representation of their position with respect to tax liability to the Department in cases where the Chief Advocate believes that the taxpayer's position is correct and that the taxpayer will otherwise have to incur unreasonable expense to represent the position;

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

    (d) to conduct public hearings at least once in every five years to receive public comment on the functioning of this Act and any need for amendment to it.

Direction

(2) The Office is under the direction of the Chief Advocate.

Financing

(3) The Office shall be financed by

    (a) such funds as may be appropriated to the purpose by Parliament; and

    (b) fees and charges established pursuant to section 7.

Officer and staff

(4) There may be appointed, pursuant to the Public Service Employment Act, such officers and staff as the Chief Advocate may require to administer the Office and carry out its functions.

Fees and charges

7. (1) The Chief Advocate shall, with the approval of the Minister, establish fees and charges to be paid by a taxpayer for the services of the Office in cases where

    (a) the Office assists the taxpayer both within and outside the circumstances described in paragraphs 6(1)(a) to (c);

    (b) it is not practicable to sever the services provided within the circumstances described in paragraphs 6(1)(a) to (c) from those outside those circumstances; and

    (c) the imposition of a fee or charge would not cause undue hardship to the taxpayer.

Use of fees,
etc.

(2) Fees and charges collected pursuant to subsection (1) shall be used to defray the costs of administration of the Office.

Report to Parliament

8. (1) The Chief Advocate shall transmit to the Speaker of the House of Commons, by September 1 in every year, a report on the activities of the Office during the financial year ending the previous April 1, which shall include a financial statement for the Office.

Recommen-
dations made

(2) The Chief Advocate may include in the report

    (a) recommendations made by the Chief Advocate pursuant to section 9 during the year and the response of the Minister to each;

    (b) without revealing the identity of any individual taxpayer, an outline of any proposal made by the Chief Advocate pursuant to section 10, in a case where the proposal was not accepted by the Department or was not acted on within a reasonable time; and

    (c) the result of any public hearings held pursuant to paragraph 6(1)(d).

Copy to the Speaker of the Senate

(3) The Speaker of the House of Commons shall, on receiving the report, forthwith transmit a copy to the Speaker of the Senate.

Laid before Parliament

(4) The Speakers of the Senate and House of Commons shall each table the report in their respective Houses during the five sitting days next following September 1 of the year it is received.

Referral to Committee for report

(5) The report of the Chief Advocate, on being tabled in the House of Commons, is automatically referred to the Committee, which shall take it under consideration and report to the House no later than the fifth day upon which the House first sits in the following year.

Recommen-
dations to the Minister

9. The Chief Advocate may make recommendations to the Minister respecting the administration of the Department, its dealings with taxpayers and the protection of the rights of taxpayers enumerated in section 3.

Proposals re taxpayers

10. The Chief Advocate may make proposals to the Minister respecting the tax liability or 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 re witnesses, documents, etc.

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

R.S., cc. 1, 2 (5th Supp.); 1994, cc. 7, 8, 13, 21, 28, 29, 38, 41; 1995, cc. 1, 3, 11, 18, 21, 38, 46; 1996, cc. 11, 21, 23; 1997, cc. 10, 12, 25, 26; 1998, cc. 19, 21, 34; 1999, cc. 10, 17, 22, 26, 31

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

220.1 For greater certainty, in the application of this Part in the determination of an issue respecting the liability of a taxpayer to pay tax, provided that

    (a) the taxpayer has fully cooperated with the Minister in providing all records, documents and information that the Minister reasonably demands and that are reasonably relevant to the establishment of tax liability of any taxpayer under this Act, and

    (b) the taxpayer advances a reasonable explanation of the financial transactions in issue,

the burden is on the Minister to prove that the taxpayer is liable to pay the tax the Minister asserts is payable.