Person against whom compliance order is sought must be named in order

Taxpayers came to Canada in 2005 but husband went back to China to work for employer and remained Chinese resident, whereas wife and daughter were residents of Canada. In some years, husband did not travel to Canada and taxpayer husband filed T1 tax returns, because he did not realize he was non-resident of Canada for income tax purposes. Each taxpayer received letter from Canada Revenue Agency (CRA), advising them they were being audited and CRA asked for documents or information. There was meeting between taxpayers’ representative and Minister at which questionnaire for mother and daughter was provided, which were incomplete, but no questionnaire was presented for husband. Minister brought application seeking order compelling taxpayers to provide Minister with books, records and information specified in requirement to provide documents or information. Application dismissed. Taxpayer husband filed tax returns for period of audit, however, determining his residency status for tax years in question was issue that lay within jurisdiction of Tax Court of Canada. Audit letters were addressed to both individual taxpayers and connected entities and entities were not specified and it was not clear who was being audited. Requirement was that person against whom compliance order was sought was one who was required under s. 231.1 or s. 231.2 of Income Tax Act to provide information and documents sought by Minister. As it was not at all clear whether letter was directed to taxpayers individually or their connected entities, first requirement under s. 231.7 of ITA for obtaining compliance order was not satisfied by Minister.

Canada (National Revenue) v. Lin (2019), 2019 CarswellNat 1690, 2019 CarswellNat 3168, 2019 FC 646, 2019 CF 646, Keith M. Boswell J. (F.C.).

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