CRA uses third parties to get information about other taxpayers to ensure they are complying with their tax responsibilities. This could include obtaining information from a business about its employees, customers or suppliers, without needing to list their specific names. CRA has recently announced that they intend to continue and increase the use of these information-gathering methods. In order to obtain such information without providing specific names, CRA must first obtain the authorization of a judge.
In an April 24, 2019 Federal Court case, CRA applied for judicial authorization to require the taxpayer, a roofing material supplier, to provide information about residential and commercial construction contractors who had an account with them. Specifically, CRA requested:
- the customers’ legal name, business or operating name, contact person, business address, postal code, and all telephone numbers on file;
- the customers’ business numbers, if known;
- the customers’ itemized transaction details including invoice date, invoice number, total sales amount, method of payment, and address of delivery; and
- all bank account information for the customer from credit applications and/or otherwise maintained by the taxpayer.
The information was sought for customers whose total annual purchase and/or billed amount was $20,000 or greater for the period January 1, 2015 to June 30, 2018. For January 1, 2018 to June 30, 2018, information on customers whose total annual purchase and/or billed amount was $10,000 or greater was to be provided.
The Court authorized the CRA to impose the information request on the taxpayer.
ACTION ITEM: CRA has indicated that they will make increased use of this ability to obtain information from one taxpayer about their customers. Consultation should be sought immediately if such a request is received.