Iristel wants court order blocking CRA from offsetting tax returns

Iristel Inc. is once again elevating its fight with the Canada Revenue Agency by asking a federal court for a new order against the CRA as they continue to duke it out over more than $60 million in tax returns the company says it has not been paid. Iristel and the CRA are fighting over claims from the company that it is owed $63.2 million in unpaid tax returns that its survival allegedly hinges on. Iristel’s latest application filed Thursday asks for an order keeping the CRA from “removing or otherwise seizing any assets or accounts” belonging to it. The company is also asking the court to stop the tax agency from using tax refunds listed in notices of assessment dated March 2021 to offset disputed assessments from 2019. The CRA audited Iristel’s tax returns in 2018, initially withholding the company’s tax returns during the audit and eventually released them after a request by Iristel. The audit did not end up altering the amount of Iristel’s returns. The CRA later 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 the second time the Minister of National Revenue Diane Lebouthillier refused. The CRA has said it thinks the company may have been using a “carousel scheme” to claim refunds on tax that it did not pay in the first place. In its application filed Thursday, Iristel says it objected to its latest assessments received from the CRA in early March and asked the agency to confirm them in accordance with Canada’s Excise Tax Act. However, it claims the CRA has not confirmed the assessments nor acknowledged Iristel’s objection. Iristel says lawyers for the other side are aware of the objection. The company claims the CRA’s actions have caused it irreparable harm which has not been considered by the federal court nor at the appeal court in the interim relief motions it previously filed. In July 2020, the Federal Court of Appeal agreed with Iristel’s argument that the federal court has jurisdiction to review the CRA’s conduct, while at the same time dismissing Iristel’s first request for interim relief. Last month, a federal court ordered the CRA to hand over to Iristel Inc. “all materials” in its possession related to the tax authority’s decision not to release the tax returns to the company. The CRA argued the company’s request was overbroad and disagreed with Iristel’s contention that there was any such “decision” for which documentation had to be provided In a separate issue, Iristel has alleged the CRA improperly withheld more than $600,000 owed to it under the Canada Emergency Wage Subsidy program. Last week, a federal court judge dismissed the CRA’s efforts to extinguish an application for judicial review from Iristel related to how it’s allegedly been dealt with by the agency in the wage subsidy fight. Judge Kevin Aalto wrote in his order that the CRA’s motion to have the application struck “misses the point,” and that Minister Lebouthillier “cannot evade a review” of her agency’s conduct. — Reporting by Hannah Daley at hdaley@thewirereport.ca and editing by Michael Lee-Murphy at mleemurphy@thewirereport.ca

Iristel wants court order blocking CRA from offsetting tax returns

News | March 12, 2021

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Iristel wants court order blocking CRA from offsetting tax returns

News | March 12, 2021

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