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Published: April 15, 2020

Last Updated: May 21, 2020

CRA Raids Accountants Grant Thornton – Only Canadian Tax Lawyers have Privilege

While there is overlap in the work that Canadian tax lawyers and tax accountants carry out on behalf of their client, the news that the Canada Revenue Agency has seized several files from a Halifax branch of Grant Thornton due to accusations of an income tax offence by a client of the accounting firm, highlights the biggest difference tax lawyers and accountants. Clients of a Canadian tax law firm enjoy solicitor client privilege. On the other hand, the files of an accountant can and will be seized by CRA and their contents will form part of a tax evasion prosecution. This will include any notes of meetings or conversations taken by the accountants or tax planning memos.

In the case of the Halifax Grant Thornton raid, there was a search warrant issued that allowed CRA to seize records relating to allegations that a specific corporation and individual had committed offences under the Income Tax Act. The execution of the search warrant will allow CRA to prepare a tax prosecution case, usually for tax evasion, an offence under the Income Tax Act, sometimes combined with fraud charges under the Criminal Code of Canada. Although the accountants had not been accused of any offences or implicated in any wrongdoing nevertheless a search warrant allows CRA to take files of any accounting clients named in the search warrant. CRA would normally execute simultaneous search warrants at the home and business premises of the taxpayer, and would seize any computers found. This can cause a disruption in the business operations of the taxpayer.

Clients of a Canadian tax lawyer enjoy solicitor client privilege, a well established common law concept. Any communications between the tax lawyer and tax client, and any files, correspondence or documents prepared are privileged and cannot be reviewed or seized by any authority, including the Canada Revenue Agency. The solicitor client privilege can in effect be extended to an accountant if the accountant is retained by the Canadian tax law firm on behalf of the taxpayer. It’s important that first the tax lawyer be retained, and then the tax lawyer can enter into a written retainer with the accountant. In this way the files and correspondence of the accountant will enjoy the benefit of the solicitor client privilege and will not be subject to seizure by CRA.

If CRA arrives at a home, or business or accountant to execute a search warrant a Canadian tax lawyer should be consulted immediately to ensure that the warrant has been properly prepared and served and that the files, documents and electronic records that CRA is attempting to seize are fully and properly set out in the search warrant. Also once a search warrant has been executed tax prosecution charges should be anticipated and a Canadian tax lawyer should be retained immediately to start preparing for a defence of the tax evasion charges that will be brought.


"This article provides information of a general nature only. It is only current at the posting date. It is not updated and it may no longer be current. It does not provide legal advice nor can it or should it be relied upon. All tax situations are specific to their facts and will differ from the situations in the articles. If you have specific legal questions you should consult a lawyer."

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