Lucinda Main, Beard Winter LLP
John J. Tobin, Torys LLP

The Basic Ethical and Professional Considerations Included in Giving a Tax Opinion

• Liability
  • Who is the client?
  • What duties are owed to the client?
  • What duties are owed to third parties?

• Standard of care
  • Opinions relied on by third parties
  • Opinions for the taxpayer's use only

• Duty to warn of risks
• Professional considerations
  • Lawyer is not an advocate in a tax opinion
  • Good faith belief of realistic possibility of success

• Dealing with facts and assumptions
  • Duty to investigate

• Types of tax opinions
  • Reasoned versus unreasoned opinions

• Opinions contrary to Canada Revenue Agency's views
• In-house opinions

Professor Colin Campbell, University of Western Ontario, Faculty of Law - London

Moderated Discussion Among Senior and Intermediate Practitioners to Share the Ethical and Professional Considerations Involving Opinions

• Tax shelters
• Public market transactions
• Assessment of tax litigation
• Audited financial statements
• Tax planning

Moderator:  Lucinda Main, Beard Winter LLP

Panelists: Professor Colin Campbell, University of Western Ontario, Faculty of Law - London
K.A. Siobhan Monaghan, Davies Ward Phillips & Vineberg LLP
Mitchell J. Sherman, Goodmans LLP

• Determining whether an instance of backdating is legitimate or improper
  • Identification of affected persons
  • Duty to avoid activity lawyers "know or ought to have known" assists a fraudulent enterprise
  • Backdating that fabricates

• Determining existence of bad purpose and effect
  • Backdating that memorializes

• Is it misleading?
  • In the context of ambiguous law or uncertain facts

• Disclosure of backdating
• Managing the client
• Withdrawal as a remedy

John J. Tobin, Torys LLP

Moderated Discussion of Practical Situations

• Client asks you to draft an agreement to purchase shares with a purchase period that has expired, and to backdate papers saying that the purchase took place before the date of expiration (client's word only, no proof)
• The owner/manager of a corporate client says company declared an end-of-year bonus to him/her to decrease the company income to the small business limit. He/She wants you to evidence the payment
• Corporate client director wants to a pass resolution in writing without a meeting of the directors; he/she signs it January and the remaining two directors are made aware of it in March. The client wants you to draft evidence that it was effective as of January
• Client tells you he/she made a loan to his/her corporation December 31, 2010 and asks you to draft a promissory note to evidence it. The corporation's financial records show the loan on the 2010 financial statements (prepared April 2011) as due to shareholder
• Client wants his/her company to issue a dividend. You are slow and do not send out the resolution until after the dividend has been paid, but you date it the day the dividend was paid. He/she is the sole director; he/she is one of five directors.

Moderator:  Lucinda Main, Beard Winter LLP
Panellists: Douglas A. Cannon, McCarthy Tétrault LLP 
Pamela L. Cross, Borden Ladner Gervais LLP - Ottawa 
John J. Tobin, Torys LLP

Questions