Federal Court will hear Iristel’s arguments against CRA in tax fight

In a tax case worth tens of millions that Iristel Inc. said its survival hinged on, the Federal Court of Appeal has agreed with the company that the Federal Court has jurisdiction to review the conduct from the Canadian Revenue Authority during the course of an audit of Iristel's tax returns. At the same time, the court has dismissed Iristel's claim for interim relief in the form of $63.2 million in tax returns it says it is owed but that the CRA is withholding. The case stems from a dispute between the company and the tax authority, with the latter saying it thinks Iristel may be using a "carousel scheme" to claim tax refunds that it did not pay in the first place. Iristel, for its part, says the CRA is using "strong-arm tactics" to "bully" the company by withholding tax returns while an audit is pending. In a Thursday release after the Wednesday decision, Iristel CEO Samer Bishay said: “We didn’t win interim relief but all taxpayers finding themselves in a dispute with the CRA won today because the court effectively told the CRA its bully tactics don’t wash." In 2018 the CRA audited Iristel's tax returns, and after initially withholding the company's tax returns during the audit, eventually released them after a request by Iristel. The audit did not end up altering the amount of Iristel's returns. This past fall, the CRA then initiated a second audit of the company covering the periods in 2019, and then expanded the audit to cover the first two months of 2020. Iristel again asked for the release of the tax returns while the audit was underway, except this time the Minister of National Revenue Diane Lebouthillier refused. Iristel filed a motion for judicial review in Federal Court, and the CRA argued that Iristel's application was "moot," saying that Iristel owed more money in taxes than the CRA was withholding. While the issue of how much money Iristel owes in taxes is proceeding in tax court, the Federal Court of appeal has dismissed the CRA's argument that Iristel's application is moot, and the Federal Court will now hear Iristel's case against the CRA. "I'm confident we will one day win in Tax Court, but the actions of the CRA to use their power in bad faith oversteps the boundaries of good governance and the Court has effectively said so,” Bishay said in the release.

Federal Court will hear Iristel’s arguments against CRA in tax fight

Brief | July 9, 2020

Unlock all the Canadian telecom, broadcasting and digital media news you need.

FREE TRIAL

SUBSCRIBE

Inside The Wire Report

Information

Hill Times Publishing

Get in Touch With Us

Federal Court will hear Iristel’s arguments against CRA in tax fight

Brief | July 9, 2020

Unlock all the Canadian telecom, broadcasting and digital media news you need.

FREE TRIAL

SUBSCRIBE

Related Stories

Iristel blossoms from Montreal apartment to national carrier

CRTC tells Iristel to pay overdue fees to Bell, Northwestel or risk losing service

CRTC boosts Iristel case in Bell disconnection dispute

Iristel seeks quick resolution to Bell disconnection threat

Reuse & Permissions

Inside The Wire Report

Information

Hill Times Publishing

Get in Touch With Us