The 2021 Federal budget proposed to amend the Income Tax Act (Canada) to permit the CRA to demand interviews with owner-managers and their employees. The authors note the potential for mischief or worse where an auditor interviews an unprepared owner-manager or employee. They note the following:
Fortunately, taxpayers can generally avoid all of this through the early engagement of tax counsel, who will ensure that potential witnesses are well prepared. It is in the interests of taxpayers to cooperate with the CRA, but such cooperation should be given through a controlled, prepared, and properly conducted interview, in which the relevant information is provided and questions are answered in a clear and succinct manner.
R Kreklewetz and S Khowaja “Cautionary Tale: CRA Interviews and Taxpayer Rights” 22:1 Tax for the Owner-Manager (Jan 2022)
