James Morand was quoted in an article titled “Canada Court Rejects Lawyer-Client Privilege for Tax Analysis,” published by Bloomberg Tax on November 14, 2018.
Writes Bloomberg: “Canadian taxpayers can’t claim attorney-client privilege for advice on the tax implications of an acquisition, a Canadian court ruled.”
The article goes on to discuss the implications of the Federal Court’s decision in Canada (National Revenue) v. Atlas Tube Canada ULC.
Accountant-prepared documents aren’t privileged, and the only way to ensure privilege is to have a lawyer retain the accountant says one source, suggesting that the case shows how not to structure a transaction if privilege is desired.
But James warns that because the court concluded the document wasn’t primarily intended to assist with structuring of the transaction, it likely wouldn’t have mattered who commissioned it. The company might have had better luck if the main purpose was to help its lawyers provide legal advice on structuring the deal: “Coupled with the report being commissioned by the lawyers, that would provide a stronger basis for establishing privilege.”
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