This is the second report on the on-going tax litigation involving sixteen GLGI donors, covering the 2004-2006 taxation years . Interestingly, after the initial confirmations of eighteen taxpayers in the fall of 2009, to our knowledge there have been no further confirmations issued. Of these eighteen, one taxpayer elected not to proceed to Tax Court, and another was derailed by procedural issues but is now back “on track” and is expected to be included with the other sixteen. The lawyers for GLGI and the Department of Justice had a “case management” meeting in June before a judge of the Tax Court. The purpose of these meetings is to set a timetable for the various steps in the litigation, either by agreement between the parties or by the judge if no agreement can be reached.
The following tentative timetable for the initial steps was agreed.
1. All relevant documents will be produced and exchanged by December 31, 2010. Unlike most civil trials, in Tax Court the parties can choose which documents they want to produce. (But if you do not produce them, it is very difficult to later rely on them at trial). Of course, the taxpayer is aware that CRA has already seen reams of documents – including emails – because of its powers to require the production of documents. Most taxpayers would tend to produce documents on the basis that CRA has already seen them.
2. Examinations for Discovery will be completed by March 31, 2011, with all follow-up questions completed by June 30, 2011. Examinations for discovery are an opportunity each side has to cross examine witnesses before trial to find further information. The Crown always chooses to examine one or more taxpayers. If the taxpayer does not know something; he is given the opportunity to find out the answer, if possible, and respond in writing. (The lawyers, in fact, do this). If this timetable is adhered to, the trial will likely be in the fall of 2011.
