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LAWYERS REQUIRED IN MOST LARGE TAX APPEALS

TCC REVIEWS NEW TAX COURT RULES APPLYING TO GENERAL PROCEDURE CASES

In a remarkable decision rendered with a great deal of humility, and with great credit to the Tax Court Justice involved, the Tax Court of Canada (“TCC”) in Tanafranca v. The King (2025 TCC 169) has taken the opportunity to review recent changes to the manner in which large taxpayers may be represented in their Tax Court Appeals.

This case is a reminder for taxpayers that, in General Procedure cases, Experienced Tax Counsel will be required – and usually for good reason.

Representation Under the General Procedure

In Tanafranca, the taxpayer sought to have her accountant represent her in a Tax Court appeal under the General Procedure. Justice Ezri reiterated that the Tax Court of Canada Act (“TCCA”) does not permit this.

Specifically, section 17.1 of the TCCA bars individual appellants from being represented by non-lawyers in General Procedure appeals. Although the newly added section 17.1(1.1) now allows a corporation or a partnership to be represented by someone other than a lawyer, the Court stressed that this exception applies only in exceptional circumstances and requires the Court’s leave.

Justice Ezri further clarified that the exception under s. 17.1(1.1) does not extend to accountants or any other class of professional representative. Rather, where leave is granted, only directors, officers, employees of a corporation, or partners of a partnership may act as representatives.

Representation Under the Informal Procedure

By contrast, the representation rules under the Informal Procedure are somewhat more flexible. Section 18.14 of the TCCA allows an appellant to be represented by a non-lawyer, including an accountant, in appeals proceeding under the Informal Procedure.

That flexibility, however, is tied directly to the monetary thresholds that determine whether an appeal may proceed under the Informal Procedure rather than the General Procedure.

For income tax appeals, the Informal Procedure is available where the federal tax and penalties in dispute for a taxation year, excluding interest, are $25,000 or less, or where the loss in issue does not exceed $50,000. For GST appeals, the Informal Procedure is limited to cases where the amount at issue is $50,000 or less.

(Note that these thresholds may be changing as per indications in the recent 2025 budget).

Takeaways

Tanafranca reminds taxpayers that representation rights before the Tax Court are not a matter of preference, but of statute. The legislative scheme mandates the involvement of legal counsel because Tax Court Appeals involving larger amounts are inherently more complex and subject to stricter procedural rules.

Experienced Tax Counsel is not merely a formality – it is often essential to navigating procedural requirements, properly framing legal issues, and protecting a taxpayer’s position before the Court.

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