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Avoiding Panama: Controlling exposure to tax disputes

Oct 26, 2016

As corporations are scrutinized more intensely for their tax planning practices, their risk of exposure to tax controversy, tax audits and potential tax disputes grows. The size and stakes of such disputes is increasing – as are the financial and reputational implications for businesses and their executive leadership.

That is why it is especially important for counsel to have a thorough communication strategy in place to effectively brief key internal stakeholders regarding potential exposure. For example, advising on how the organization’s tax risk has been mitigated, and flagging key strategic decision points and important timelines is crucial.

As part of Osler’s Brief the Board series, Mary Paterson, a partner in Osler’s Litigation Practice Group, and Amanda Heale, a partner in Osler’s Taxation Practice Group, have developed resources to provide an overview of what an organization’s leadership needs to know and do when facing tax litigation. Specifically, they offer guidance on

  • assessing what is at stake
  • developing an effective tax audit defence and handling the organization’s relationship with the CRA
  • strategically managing the tax litigation and the business’s shareholders and reputation

The following resources provide a framework for mitigating exposure and the impact of possible tax disputes or litigation:

 

The essentials

  • Transaction: Document the commercial objective/business reason in reports to the board
  • Audit: Advise board on how organization is avoiding waiver of privilege, managing risk and containing costs
  • Objection: Ensure board is aware of large corporation rules, deadlines and potential for settlement
  • Litigation: Provide board with information on reputational implications, costs and timelines

Access the PDF of TakeawaysReview the slide deck

 

 

 

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