Accountants who recommended tax shelters and earned commissions for doing so that weren’t disclosed to their clients need to think twice about their bank account balances. In Lemberg v. Perris, 2010 ONSC 3690, the Ontario Superior Court ordered an Oakville accountant to pay his former clients $45,000 in damages for recommending an art-flip shelter to them. What his clients didn’t know until after the fact was that he had received a $7,500 commission for recommending the shelter. Unfortunately for the clients, the scheme involved was the very one considered by Associate Chief Justice Bowman (as he then was) in Klotz v. The Queen, 2004 TCC 147, which didn’t turn out too well for the taxpayers. The clients sued the accountant and won damages. Will this lead to a spate of lawsuits against similarly-situated accountants?
