Voluntary Disclosures and Judicial Review: Créations Guimel Inc. v. Canada (National Revenue), 2025 FC 814
The Canada Revenue Agency’s (CRA) Voluntary Disclosures Program (VDP) provides taxpayers with an opportunity to correct previous tax errors or omissions and potentially obtain relief from penalties and interest. For taxpayers with historical non-compliance, the program can offer a valuable way to address outstanding tax obligations before the CRA identifies the issue.
However, not every application is accepted. Where the CRA refuses a voluntary disclosure, taxpayers may request a second administrative review to ask the CRA to reconsider its decision. As of the date of this article, taxpayers can send a written request to the Assistant Director of the Shawinigan National Verification and Collections Centre. If a second administrative review is unsuccessful a taxpayer can pursue judicial review in Federal Court.
A recent Federal Court judicial review decision, Créations Guimel Inc. v. Canada (National Revenue), 2025 FC 814 [Creations], is informative and illustrates the importance of providing complete disclosure to the VDP and responding to the CRA’s requests for information.
Understanding the Second Administrative Review
A second administrative review provides an opportunity for taxpayers to challenge a discretionary CRA decision refusing relief under the VDP. It allows the taxpayer to explain why the original decision should be reconsidered, identify potential errors, and provide additional information or supporting documentation.
The request should focus on the specific reasons the CRA refused the application. Simply repeating the original submission or expressing disagreement with the outcome is unlikely to be sufficient. Instead, taxpayers should explain why the decision warrants reconsideration based on the facts, relevant evidence, and applicable program requirements.
Potential grounds for reconsideration may include a misunderstanding of material facts, failure to consider relevant information, or concerns about the fairness or reasonableness of the decision-making process.
According to CRA, as “a general rule, you should ask the Canada Revenue Agency (CRA) for a second administrative review before you file an application for judicial review with the Federal Court. If you believe the CRA did not properly exercise its discretion in arriving at the decision, you can apply for judicial review of that decision to the Federal Court within 30 days of the date you received the CRA decision.”
VDP Judicial Review - Créations Guimel Inc. v. Canada (National Revenue), 2025 FC 814
In Créations Guimel Inc. v. Canada (National Revenue), 2025 FC 814, the Federal Court of Canada judicially reviewed the CRA’s refusal of a VDP application involving historical corporate tax matters.
The corporation’s VDP application covered the 2008 to 2017 taxation years and concerned a previous sale of know-how, the investment of the proceeds in a Luxembourg bank account, and the purchase of a rental property in France. However, the underlying transaction had occurred in 2007, a taxation year that was not included in the application.
During its review, the CRA requested an amended corporate tax return for 2007 to report the transaction that generated the proceeds. Despite repeated requests, the corporation did not provide the requested return. The CRA subsequently refused the VDP application.
The corporation challenged the decision before the Federal Court. In its May 6, 2025 decision, the Court dismissed the application for judicial review, accepting that the omitted transaction and the requested information were relevant to assessing the completeness of the disclosure.
The case demonstrates that taxpayers cannot necessarily limit their disclosures to the taxation years initially identified when relevant transactions have implications for other periods. It also reinforces the importance of responding to CRA requests for information.
Although Créations Guimel concerned judicial review rather than a second administrative review, its lessons are directly relevant to taxpayers preparing a request for reconsideration following a VDP refusal.
Key Considerations When Requesting a Second Administrative Review
The first step is to carefully examine the CRA’s refusal letter and identify the precise reasons for the decision. If the refusal relates to missing information, as in Créations, the taxpayer should explain the omission and provide the outstanding documents where possible.
A strong request should also include a clear chronology of the application, the CRA’s information requests, the taxpayer’s responses, and the events leading to the refusal. This can help demonstrate whether the taxpayer made reasonable efforts to comply and whether relevant circumstances were properly considered.
Where additional evidence is available, it should be submitted with an explanation of how it addresses the CRA’s concerns. The objective is to present a focused, evidence-based argument demonstrating why reconsideration is justified.
Taxpayers should also consider whether the refusal raises concerns about procedural fairness or an unreasonable exercise of discretion. Such arguments must be grounded in the facts and the applicable legal principles rather than simply reflecting dissatisfaction with the outcome.
Administrative Review and Judicial Review
A second administrative review should be distinguished from judicial review before the Federal Court. The former asks the CRA to reconsider its decision, while the latter allows the Court, for example, to examine the legality and reasonableness of the administrative decision and whether applicable procedural fairness requirements were met.
Under subsection 18.1(2) of the Federal Courts Act, R.S.C., 1985, c. F-7, the general deadline for commencing an application for judicial review is 30 days after the decision is communicated, subject to the Court’s power to extend the time.
Conclusion
A second administrative review can provide an important opportunity to challenge a CRA refusal under the Voluntary Disclosures Program. However, the strength of the request depends on identifying the specific deficiencies in the original decision and addressing them with clear explanations and supporting evidence.
The Federal Court’s decision in Créations reinforces the importance of complete disclosures, relevant historical information, and timely responses to CRA requests. For taxpayers seeking reconsideration, these principles highlight the need for careful preparation and a focused presentation of the facts.
Ultimately, a second administrative review should be treated as a substantive opportunity to demonstrate why the CRA’s decision warrants reconsideration, while ensuring that any potential judicial review deadlines are protected.
SpenceDrake Tax Law – Toronto 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.