Tax Law Services Portfolio - Memorandum of Understanding
The Department of Justice (DOJ) in Canada primarily represents the Crown, not the Canada Revenue Agency (CRA) as an independent entity.
How it works:
- The CRA is a federal agency responsible for tax administration.
- When legal matters arise (such as tax disputes or prosecutions), the DOJ lawyers represent the Crown — that is, the Government of Canada — in court.
- In tax cases, DOJ lawyers often act on behalf of the CRA, but their legal obligation is to represent the broader interests of the Crown, not to act as CRA’s private counsel.
So, while DOJ lawyers may argue positions advanced by the CRA, they are not the CRA’s personal legal team. Their duty is to the Crown, and their client in tax litigation is technically His Majesty the King in Right of Canada, as represented by the CRA.
Canada Revenue Agency | Department of Justice |
Administers and enforces Canada’s tax laws | Provides legal services to federal departments and represents the Crown |
Investigates tax matters (audits, assessments, criminal investigations) | Represents the Crown in tax litigation and prosecutions |
Refers legal matters to DOJ when enforcement or litigation is required | Decides whether and how to proceed legally (independent judgment) |
Cannot prosecute or compel court orders on its own | Files applications in court on behalf of the Crown, not the CRA |
The CRA: Administrator and Investigator
- The CRA administers tax legislation such as the Income Tax Act, RSC 1985, c 1 (5th Supp) and Excise Tax Act, RSC 1985, c E-15.
- It conducts audits, makes tax assessments, and may investigate potential tax evasion or fraud.
- When the CRA has to enforce compliance (e.g., compel documents or prosecute), it refers the matter to DOJ.
The DOJ: Legal Advisor and Crown Counsel
- The Department of Justice acts as the lawyer for the federal government, not a personal attorney for the CRA.
- In tax matters, DOJ lawyers represent:
- The Minister of National Revenue in civil litigation (like appeals of CRA assessments),
- The Crown in criminal prosecutions of tax evasion or fraud.
Even though CRA may “initiate” a file, DOJ lawyers are assumed to exercise independent legal judgment and are obligated to uphold the rule of law and public interest — even if that conflicts with CRA preferences.
References:
Canada (National Revenue) v. Thompson, 2016 SCC 21 (CanLII), [2016] 1 SCR 381
Canada (National Revenue) v. Miller, 2021 FC 851 (CanLII)
SpenceDrake Tax Law – Tax Lawyers
Disclaimer
Each article/blog post is only meant to provide general information. It is posted on a specific date. Laws and rules change. Please know that it may be out of date. It is not meant to provide legal advice, and it does not provide legal advice. It cannot be relied on. Every tax situation is unique, and that may mean situations differ from this article/blog. If you have legal questions, please consult a lawyer.