Lawyer Julie Guindon was originally penalised for her actions in advising a bogus charitable donation scheme, but the Tax Court of Canada found the penalties amounted to criminal sanctions – meaning tax lawyers can rely on protection under the Charter of Rights and Freedoms and must be prosecuted through the criminal courts rather than the Tax Court.

Burden of proof

According to a report in the Law Times, Justice Paul Bédard’s ruling will also see a higher burden of proof required to prosecute these types of cases.
‘I think this is actually quite a favourable outcome for people who have backed abusive donation arrangements,’ Adam Parachin, a professor at the law faculty of the University of Western Ontario, told the newspaper. ‘It’s a good outcome for them probably; a negative outcome for taxpayers at large; and, in some ways, a clinic on how not to legislatively draft… It’s such a negative decision for the tax regulator.’