Dr. Klundert was an optometrist who didn’t report his income. CRA prosecuted him through three trials, two appeals to the Ontario Court of Appeal and one attempt to appeal to the Supreme Court of Canada. The Ontario Court convicted him of tax evasion. CRA then reassessed his 1993 – 1996 tax years and he appealed the reassessments to the TCC.
Justice Pizzitelli dismissed Dr. Klundert’s appeals because his only complaint was that the CRA got its evidence illegally for the first criminal trial. Pizzitelli J. rejected Dr. Klundert’s appeal, largely because Dr. Klundert didn’t explain how the CRA’s process was illegal and he never raised Charter of Rights
arguments in the criminal courts.
But Pizzitelli did say “I accept, however, that when a Charter violation has been determined by a Court having competent jurisdiction that we [the TCC] have the jurisdiction to grant a discretionary remedy such as dismissing an assessment where the effect of that decided violation would leave no evidence on which this Court could dismiss the appeal or otherwise vary it or send it back for reconsideration and reassessment under section 171 of the Act.” (Para. 36)
So, if you were prosecuted for tax evasion or some other crime, such as drug trafficking, and the criminal court refused to accept the government’s evidence because of a Charter of Rights violation, you may be able to stop CRA from using the evidence for tax purposes too.