One of the biggest advantages to retaining a tax lawyer over a tax accountant is the protection offered by solicitor and client privilege. Any communications between you and your tax lawyer and any work product provided to you by your tax lawyer is protected by this privilege. That means that the Canada Revenue Agency (“CRA”) cannot compel the lawyer or taxpayer to produce this information in a civil or criminal court proceeding.
The same protection is not offered to communications and work product of your tax accountant. The CRA is able to audit all the records of your accountant as well as compel an accountant to give evidence against you in any civil or criminal court proceeding.
The case of Terenet v. The Queen is a good example. In this case, the CRA obtained court orders allowing them to conduct a number of examination for discoveries of well known accounting firms Ernst & Young and Deloitte & Touche. The Court ordered E&Y and D&T to submit to the examination for the purpose of allowing CRA to gather evidence in support of its civil case against the taxpayer.