Accountants, valuators and anyone else who provides or assists in providing information (to the CRA or to taxpayers) respecting income tax or GST/HST (“Advisors”) should be aware of their potential liability for “advisor penalties.” Advisors generally know that their clients could face gross negligence penalties in appropriate cases of “reprehensible recklessness." However, it is less well known that Advisors risk similar penalties if their actions reach “culpable conduct.”
Advisor penalties can be severe. On the high end, for each false statement the penalty can include all fees charged by the Advisor plus $100,000.[1] The same false statement made to separate persons counts as separate statements. In 2015, the Supreme Court of Canada upheld an advisor penalty for over half a million dollars against a family and wills lawyer who only charged $1,000 in fees, but where many persons were involved.[2]
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