What to Expect from the Tax Court in a Lengthy Trial

• Author: Hon. Campbell Miller
• Pages: 23-39

23

Chapter 2

What to Expect from the

Tax Court in a Lengthy Trial

hon. campbell miller

A. INTRODUCTION

Bernard Levin, in his book In T hese Times, opined that a judge giving a

speech should be permitted no statement more controversial than to thank

the leaders of a Scout patrol who have helped him across the street. He

concluded that the only course for a judge with opinions is to refrain f rom

expressing them. Thus it is with considerable caution that I approach this

subject.

In the lat ter part of this paper, I will describe what counsel can expect

from the Tax Court in the context of a lengt hy trial. This may be a tad pre-

sumptuous on my part as a relative newcomer of only six years, but I do

believe this remains a worthwhile exercise. First, however, I will lay out my

vision of the role of the Tax Court in our systems of justice and taxation. I

will also consider the role of technology in the cour troom. I appreciate that

the title of the book Taxation and Valuation of Technology is not directed at

this particula r aspect of the term “technology,” yet when I look to the future

and see, for example, lengthy transfer pricing cases looming on t he hor-

izon, I conclude that it would be a gross oversight not to address how justice

might be served in the computer-driven electronic age.

B. THE ROLE OF THE TAX COURT IN TAX LAW

What is t he role of the Cour t itself? To resolve disputes, certainly; also, to

interpret and apply t he law in a fair and impart ial manner, free of outside

24 hon. campbell miller

inf‌luence, with no fear of, or favour from, the other arms of government.

These “motherhood and apple pie” statements would, I believe, evoke little

debate.

But what about the Court as a forum for the development of tax law?

In an area as vast and complex as the tax system, rife with technical and,

at times, convoluted language, t he forum charged with interpreting those

words must be considered an appropriate body to develop the law. That de-

velopment has traditionally been, I would suggest, a process of slow, incre-

mental development, ever wary of steppin g on legislative toes. In recent

years, though, in large measure due to the Charter,1 but also due to some

legislative buck-passing, courts have ventu red into t he social policy arena.

This is less evident in a specialized court such as the Tax Court, but the

Court has its own str uggles with “policy,” from a GAAR perspec tive. All to

say, members of the Tax Court must be knowledgeable in the law and at-

tuned to the social issues that wait in the wings.

The answer I have given more than once to someone who asks a fter the

purpose of the Tax Court, is that the Tax Cour t is there to listen. It is there

to allow t he tax payer, individual, or corporation, to b e able to say, “Someone

listened to my story, understood my concern, and addressed it.” In doing that,

whic h sound s so eas y, I belie ve we me et one of t he Cou rt’s obj ectiv es: to in stil

public conf‌idence in our systems of justice and taxation. We do that as much

by listening as we do by actually renderin g a decision, if not more so.

Do we shake that public conf‌idence if we express some concern about

the legislation? Not if handled properly. The legislators do not have the abil-

ity, nor the requirement, to provide immediate answers. T hey do not have

the benef‌it of hearing daily the taxpayers’ tales of stru ggle to apply the laws

to their circu mstances. The Tax Cou rt does. If there is some feedback that

can f‌low from that e xperience, then it would be ir responsible not to a lert

Parliament through our judgments.

C. TECHNOLOGY IN THE COURTROOM

Tax Court members cannot be blind to constant, fast-paced change in the

computer world. The Tax Court faces issues unheard of even twenty years

ago. Applying tax legislation, written in a pre-computer age, to a modern,

highly complex tec hnological case requires some deft maneuvering. Deci-

sions must be rendered — courts cannot sit back and wait until legislation

catches up. The Tax Court must provide answers with the tools currently at

its disposal, no matter how diff‌icu lt or, at times, unwieldy the task.

1 Part I of the Const itution Act, 1982 , being Schedule B to the Can ada Act 1982 (U.K.), 1982, c. 11.