The Penalty That Lands On The Adviser

A lawyer who practised family law and wills agreed to write a tax opinion on a donation programme. She had no expertise in income tax. The Supreme Court of Canada eventually decided whether the penalty assessed against her was a criminal sanction, and its answer determines what protections any adviser has.

A Note On Currency

Everything here is stated as verified in August 2026 and requires confirmation before reliance.

We quote the text of subsection 163.2(4) and the opening of the definition of culpable conduct as they appear in the Supreme Court's decision and in commentary[1][5]. The definition we obtained is truncated and we do not complete it.

Critically: we did not obtain subsection 163.2(5) or any of the penalty computation provisions. This article therefore states no dollar amount for either penalty, and a reader should not infer one from anything here.

We did not obtain the statutory definitions of excluded activity or subordinate, and report a source's description of one of them without independent verification.

Commentary reports that CRA revised Information Circular IC01-1R2 in 2026[6]. We did not obtain the revised circular.

Several of our commentary sources carry near-identical wording across different publications and we treat them as one line of commentary[3][4].

This is not tax or legal advice. Any adviser facing a proposed penalty needs representation, not an article.

Why This One Is Different

A note on the place of this article in the series. This section is our own analysis.

Every other piece in this sequence has described a liability belonging to a business. The construction firm owes the tax. The processor owes the premiums. The professional corporation owes the assessment.

Section 163.2 does something else. It creates a liability for the person the business hired, arising from the same statement, assessed separately, and payable by them.

Commentary describes the provision as relating to third party tax advisors, including Canadian tax lawyers and tax accountants, through which CRA can impose civil penalties on advisers who make false statements relating to tax matters or cause another person to make false tax statements[3].

Three consequences.

The adviser's exposure is not derivative. It does not depend on the client failing to pay, and it is not a guarantee of the client's liability.

It arises from the adviser's own conduct in relation to a statement.

And it exists alongside whatever the client owes, so a single false statement can generate a liability for the taxpayer and a separate one for the person who helped produce it.

This publication is written for business owners and for the students who will eventually advise them. This article is for the second group.

Two Penalties, Not One

The structure of the provision.

The Supreme Court records that section 163.2, enacted in 2000, contains two administrative penalties: the planner penalty in subsection (2) and the preparer penalty in subsection (4)[1].

Commentary describes the planner penalty as targeting those who make, furnish, participate in, or cause another to make or furnish a false statement in the course of a planning activity or valuation activity[6].

Two observations, ours.

The two limbs address different roles in the same chain. One is aimed at the person who designs or values an arrangement; the other at the person who prepares or assists with the statement that goes to CRA.

And a single person can occupy both roles. An accountant who advises on a structure and then prepares the return that reports it has been a planner and a preparer in respect of the same facts.

The Court notes that the planner penalty was not at issue in the appeal before it[1], which means the leading authority interprets one limb and not the other. That is worth remembering before reading Guindon as settling the whole provision.

The Words Of The Preparer Penalty

The provision itself, quoted as the Court sets it out.

Subsection 163.2(4) provides that every person who makes, or participates in, assents to or acquiesces in the making of, a statement to, or by or on behalf of, another person that the person knows, or would reasonably be expected to know but for circumstances amounting to culpable conduct, is a false statement that could be used by or on behalf of the other person for a purpose of this Act is liable to a penalty in respect of the false statement[1].

Break that into its elements, and this breakdown is ours.

A person, undefined and therefore not limited to professionals.

Who makes, participates in, assents to or acquiesces in the making of a statement. Four verbs, of descending activity.

A statement to, or by or on behalf of, another person.

Which they know is false, or would reasonably be expected to know but for circumstances amounting to culpable conduct.

That could be used by that other person for a purpose of the Act. Note could, not was.

Two features stand out. The knowledge requirement has an objective route as well as a subjective one. And the statement need only be capable of use, which does not obviously require that it was filed.

The Widest Word In The Provision

The element we think advisers underestimate. This section is our own analysis.

The four verbs are not equivalent, and they descend in a specific direction.

Makes is authorship. You produced the statement.

Participates in is contribution. You did part of the work.

Assents to is agreement. You were asked and you approved.

Acquiesces in is the absence of objection. You knew and you did not stop it.

The last of those does not require the adviser to have done anything at all.

Three situations it plainly reaches.

A partner who reviews and signs off work prepared by someone else.

An adviser who raises a concern, is overruled by the client, and files anyway.

A firm that continues acting for a client whose position it has come to doubt.

We are not suggesting any of those is automatically culpable. The knowledge and culpable conduct requirements still have to be satisfied. But the conduct element is satisfied by not objecting, which means an adviser cannot rely on having kept their hands off the file.

What Culpable Conduct Means

The standard, from the definition in the provision.

Commentary quotes subsection 163.2(1) as defining culpable conduct as conduct, whether an act or a failure to act, that is tantamount to intentional conduct; shows an indifference as to whether this Act is complied with[5].

The definition we obtained is cut off at that point, and we do not complete it. Commentary in this area commonly refers to a further limb concerning disregard of the law, but we did not obtain its text and will not paraphrase a statutory definition we have not read.

Two observations on the part we do have, ours.

The phrase whether an act or a failure to act confirms the point made above. Omission is within the definition expressly.

And indifference as to whether this Act is complied with is a demanding standard in one direction and a lenient one in another. It does not require an intention to evade. It requires not caring.

Our own reading is that this is where most real cases sit. Advisers are rarely accused of designing a fraud. They are accused of processing something without asking the question that would have revealed the problem, which is a good description of indifference.

Not Ordinary Negligence

The limit the Supreme Court placed on the provision, and it is the single most important sentence for an adviser.

The Court states that the third party penalties are meant to capture serious conduct, not ordinary negligence or simple mistakes on the part of a tax preparer or planner[1].

It describes the purpose of the proceedings as being to promote honesty and deter gross negligence, or worse, on the part of the preparers[1].

Three consequences, ours.

The threshold is gross negligence or worse. An error, even a costly one, is not the target.

That places the provision alongside the gross negligence standard applied to taxpayers themselves, rather than at some lower level applicable to professionals.

And it gives an adviser facing a proposed penalty a stated threshold to argue against, from the highest court, in language the Agency's own guidance must be read consistently with.

We would put the practical significance this way. An adviser who made a mistake has an answer. An adviser who did not ask an obvious question may not, because failing to ask is closer to indifference than to error.

Guindon

The facts, from commentary.

Ms Guindon was a lawyer whose practice primarily focused on family law and wills and estates, and who had no expertise in income tax law. She nonetheless agreed to provide a legal tax opinion on a donation programme[3].

Commentary records the procedural history. The Tax Court found that her conduct was culpable within the meaning of section 163.2 but vacated the assessment, on the basis that the provision is criminal in nature and involves a sanction that is a true penal consequence[3].

CRA appealed. The Federal Court of Appeal overturned the Tax Court's decision. Ms Guindon appealed to the Supreme Court[3].

Note what that history establishes, and this is our own observation.

Her conduct was found culpable at first instance and that finding was not what saved her at the Tax Court. She won there on a constitutional argument, not on the merits of her conduct.

Which means the case that reached the Supreme Court was not about whether she had done anything wrong. It was about what kind of proceeding a third-party penalty assessment is.

What The Court Actually Decided

The holding, stated precisely because it is often described loosely.

Commentary records that the Supreme Court upheld the Federal Court of Appeal's decision on the basis that the third party penalty in section 163.2 was not criminal in nature nor provided true penal consequences[3].

The consequence is that section 11 of the Charter does not apply to a third-party penalty assessment.

Two observations, ours.

Section 11 confers the protections of a person charged with an offence: the presumption of innocence, proof beyond a reasonable doubt, the right to be tried within a reasonable time, and others.

Holding that the provision is administrative means an adviser assessed under it has none of those protections as of right.

We flag that this is a description of the constitutional holding, not of the merits. The Court's separate statement that the penalties target serious conduct rather than ordinary negligence[1] remains the substantive standard, and the two should not be confused.

An adviser reading only that the penalties are administrative may conclude the provision is toothless. An adviser reading only that Charter protections do not apply may conclude it is unanswerable. Both are wrong.

The Test The Court Applied

The reasoning, which is worth understanding because it generalises.

The Court states that section 11 applies to proceedings that are criminal in nature and that have true penal consequences; that a proceeding is criminal in nature when it is aimed at promoting public order and welfare within a public sphere of activity; and that proceedings of an administrative nature are primarily intended to maintain compliance or to regulate conduct within a limited sphere of activity[3].

It adds that the focus of the inquiry is not on the nature of the act which is the subject of the proceedings, but on the nature of the proceedings themselves, taking into account their purpose as well as their procedure[1], and that with respect to the process itself, the analysis is concerned with the extent to which it bears the traditional hallmarks of a criminal proceeding[1].

The Court also notes structurally that criminal offences are found in Part XV, Administration and Enforcement, and are prosecuted before a court of criminal jurisdiction[1].

Our own reading of why that mattered. Section 163.2 sits outside the offence provisions, is assessed rather than prosecuted, and is directed at conduct within the tax system rather than at the public at large. On the Court's framing, that is what makes it administrative.

The phrase limited sphere of activity is doing the work, and the limited sphere is the practice of tax advice.

She Had No Tax Expertise

The fact that should trouble every professional. This section is our own analysis.

The commentary's description is that Ms Guindon practised family law and wills and estates, had no expertise in income tax law, and nonetheless agreed to provide a tax opinion[3].

Lack of expertise did not operate as a defence. If anything the sequence runs the other way: an opinion given outside one's competence is harder to defend as reasonable, not easier.

Three situations this describes in ordinary practice.

A general practitioner asked to opine on a structure because the client's tax adviser wants a second signature.

A bookkeeper asked to take a position on a treatment that is genuinely a tax question.

A generalist accountant asked about something at the edge of their practice, where declining feels unhelpful and the client is insistent.

The practical instruction is uncomfortable but simple. Being out of your depth is a reason to decline, not a mitigating circumstance. An adviser who signs something they are not competent to assess has not reduced their exposure by not understanding it.

The Person Who Relied On Her

A second case which completes the picture, and which we find the more instructive of the two.

Commentary describes the Tax Court decision in Ploughman v The Queen as demonstrating how tax planners and preparers such as accountants may incur third-party penalties[2].

It records that Mr Ploughman's culpable conduct consists of ignorance of his duties as a Trustee, failure to consult a knowledgeable Canadian tax lawyer as to whether retroactive dating is permissible under Canadian tax law, and failure to do his due diligence when giving out donation receipts[2].

And critically, that the Court also found Mr Ploughman's reliance on Ms Guindon not to fall under subsection 163.2(6), the good faith reliance exception[2].

Set the two cases together, and this is our own observation.

The lawyer who wrote the opinion was assessed a penalty.

The person who relied on that opinion was also assessed a penalty, and his reliance did not bring him within the exception.

Both ends of the advisory chain were caught in respect of the same programme. That is the structural point, and it is not intuitive.

An Opinion Is Not A Shield

The lesson from the pairing, and it runs against professional instinct. This section is our own analysis.

The reflex, when a transaction looks uncertain, is to obtain an opinion. It documents care, it demonstrates the question was asked, and it transfers responsibility to somebody with the relevant expertise.

On the Ploughman facts as reported, that reflex failed. His reliance on a lawyer's opinion was found not to fall within the good faith exception.

Three elements of the finding are worth isolating, because they suggest why.

The court identified ignorance of his own duties, which an external opinion does not cure.

It identified failure to consult a knowledgeable Canadian tax lawyer, which indicates the court did not regard the opinion he had as coming from one.

And it identified failure to do his own due diligence, which indicates the opinion was treated as a substitute for enquiry rather than an input to it.

Our own conclusion, offered as a reading rather than a rule: an opinion appears to protect where it is competently sourced and genuinely relied on as part of a real enquiry, and not where it is obtained to close a question the person was obliged to consider themselves.

We flag that we did not read the judgment and take these findings from a single commentary source.

The Good Faith Exception

The relief, as commentary describes it.

Commentary describes subsection 163.2(6) as exempting advisers from the third-party planner penalty when the advisor relied, in good faith, on information provided to the advisor by or on behalf of the other person[2].

Two observations, ours, and both are cautions.

The exception as described concerns reliance on information provided by the other person. That is a narrower thing than reliance on professional advice generally, and the Ploughman finding is consistent with that narrower reading.

And the source describes it as applying to the planner penalty. We did not establish its application to the preparer penalty and do not assert one.

Our own reading of its practical shape. An adviser who is given facts by a client and works from them in good faith is in a different position from one who accepts a conclusion. Facts come from the client; conclusions are the adviser's job.

That distinction is not stated in our sources, and we offer it as a way of understanding the provision rather than as its meaning. Anyone relying on the exception needs its actual text.

Where The Exception Is Not Available

A limitation reported by a recent source, which we pass on with a caveat.

Commentary on CRA's 2026 revision of its circular states that if a CPA is involved in an excluded activity, the good faith reliance exception in subsection 163.2(6) is not available, and that this is particularly relevant for those involved in the promotion or sale of tax shelters, flow-through shares, or other arrangements designed to deliver tax benefits[6].

We did not obtain the statutory definition of excluded activity and report this as the source states it. The term is counterintuitive on its face, since an activity described as excluded turns out to remove a protection rather than confer one, and a reader should not rely on our understanding of it.

What we can say about the practical significance, and this is ours.

The categories named are ones where an adviser's role shifts from advising on an arrangement to promoting or selling it.

That is a different relationship, with a commercial interest in the outcome, and it is unsurprising that the protection available to someone relying on a client's information does not extend to it.

Flow-through shares are addressed elsewhere in this series, and an adviser whose practice includes placing them should treat this specific point as one to verify rather than to accept from us.

The Crown Bears The Onus

A procedural feature that runs against the ordinary rule in tax, and materially in the adviser's favour.

Commentary states that the reverse onus provision in subsection 163(3) requires the Crown to prove its case in a preparer penalty assessment, so that there is a kind of presumption of innocence established in the Income Tax Act, and consequently being presumed to have engaged in culpable conduct is not an issue[5].

Two observations, ours.

In ordinary tax disputes the taxpayer bears the burden of demolishing the Minister's assumptions. That is the baseline this publication has described elsewhere, and it is a real disadvantage.

On penalties, the burden runs the other way. The Crown must establish the facts justifying the penalty.

Which means an adviser facing a proposed third-party penalty is in a procedurally stronger position than the same person disputing an ordinary reassessment, and should not approach the two the same way.

We note that the commentary is describing this in the context of arguing that Charter protections were not needed, which is a particular rhetorical setting. The proposition itself is stated plainly and is consistent with how penalty provisions generally operate.

But Only To A Civil Standard

The qualification on that advantage.

The same commentary notes that the standard of proof in civil tax cases, including penalties cases, is balance of probabilities, which is a more relaxed standard than the criminal standard[5].

It then poses the question rhetorically: if tax preparation or planning is more likely than not misconduct under section 163.2, wouldn't most of us agree that the preparer or planner should be punished?[5]

Two observations, ours.

The combination is coherent. The Crown must prove it, and must prove it only on the balance of probabilities.

So the protection is real but not decisive. An adviser cannot simply require the Crown to meet a criminal standard, which is precisely what Guindon determined.

We include the rhetorical question because it is a fair statement of the policy position, and because a reader deciding what they think of this provision should hear it. An adviser who was more likely than not indifferent to whether the Act was complied with is not an obviously sympathetic figure.

The counter-argument is equally fair and we would state it: more likely than not is a low bar for a finding that ends careers, and the Court itself was careful to say the provision targets serious conduct rather than mistakes.

A Penalty Per Statement

A structural point, and a boundary on what we are prepared to say. This section is our own analysis.

The statutory text we obtained says a person who does the specified things is liable to a penalty in respect of the false statement[1]. Singular.

That indicates the penalty attaches to each false statement, rather than to an engagement, a client or a year.

We did not obtain subsection 163.2(5) or any of the penalty computation provisions, and this article therefore states no dollar amount for either penalty.

We are being explicit about that because it would be easy to fill the gap with a figure from memory or from a secondary source, and a wrong penalty formula in an article read by advisers would be worse than no formula at all.

What we can say without the computation is the shape of the exposure, which is the subject of the next section.

What Volume Does To That

The consequence of a per-statement penalty in a practice, computed by us on illustrative volumes.

A sole practitioner filing 120 returns a year at an assumed $650 fee earns roughly $78,000 from them. A small firm at 400 returns, roughly $260,000. A multi-preparer office at 1,200 returns, roughly $780,000.

Now consider how errors actually occur, which is rarely one file at a time.

An unusual claim on a few files might affect 8 of 400 returns.

A template applied to a client segment might affect 40.

A position taken across the practice might affect 140.

Two observations, ours.

A systematic position produces many separate statements, not one. On the per-statement reading above, that is the multiplier.

And the compensation earned across those files is the fee, not the tax at stake. At the 10 percent case, roughly $26,000 of fees across 40 statements; at 35 percent, roughly $91,000 across 140.

The asymmetry is the point. The client bears tax, interest and possibly their own penalty. The adviser bears a separate penalty on the same statement, having earned a fee that bears no relationship to the amount at issue.

The Circular Was Revised In 2026

A currency point that matters for anyone researching this now.

Commentary published in 2026 describes CRA's update to Information Circular IC01-1R2 on third-party penalties, focusing on culpable conduct, excluded activity, subordinate, and the operative subsections 163.2(1), (2), (4), (5), (8) and (12)[6].

We did not obtain the revised circular and report only that commentary describes a 2026 revision and identifies the concepts it addresses.

Three consequences, ours.

Material written before 2026 may describe the previous version, and this area has now joined the list in this series where professional commentary goes stale on a specific point.

The subsections listed include (8) and (12), neither of which we have addressed and neither of which appears in the sources we obtained. There is more in this provision than this article covers.

And the concept of subordinate appears in that list. We did not obtain its definition and say nothing about it, but its presence suggests the provision addresses the position of staff working under a principal, which would matter to any firm with employed preparers.

An adviser taking this seriously should start from the current circular rather than from any article, including this one.

What The Auditor Actually Examines

The enquiry in practice. This section is our own analysis, and it describes an examination of the adviser rather than the client.

The engagement file, and what enquiries were made before a position was taken.

Correspondence with the client, particularly anything recording a concern raised and not resolved.

Whether the same position appears across multiple clients, which converts one judgment into many statements.

The adviser's competence in the area, given that Guindon concerned an opinion given outside a practice area.

Reliance on third-party opinions, and whether they were competently sourced and genuinely used.

Compensation arrangements, since the provisions refer to gross compensation and since promotion-linked remuneration bears on the excluded activity question.

Review and sign-off records, which are where assent and acquiescence become documented.

The seventh item deserves emphasis. A firm's own quality control file, created to demonstrate diligence, is also the record of who approved what.

What Records Survive

Contemporaneous notes of the enquiries made before a position was adopted, dated.

Written advice to the client where a concern was raised, including where the client declined to act on it.

The basis for any position applied across multiple clients, documented once and properly.

Any third-party opinion relied on, with a record of the enquiries that accompanied it rather than replaced it.

Evidence of the adviser's competence or of a referral where competence was lacking.

Engagement terms defining scope and what the adviser did and did not assess.

Review and sign-off trails, which will be read as records of assent.

What To Do

Understand that this is your liability, not your client's. The penalty is assessed against the adviser on the same statement and does not depend on the client failing to pay.

Note that acquiescence is enough. The provision reaches those who assent to or acquiesce in the making of a statement, so keeping your hands off the file is not protective.

Hold on to the threshold. The Supreme Court states the penalties target serious conduct, not ordinary negligence or simple mistakes.

Decline work outside your competence. Guindon concerned a lawyer with no tax expertise who gave a tax opinion, and the lack of expertise did not assist her.

Do not treat an opinion as a transfer of responsibility. In Ploughman, reliance on an opinion was found not to fall within the good faith exception, alongside findings of failure to make his own enquiries.

Document the enquiry, not just the conclusion. The findings in that case were about what was not asked.

Treat a position applied across clients as many statements. The provision refers to a penalty in respect of the false statement, and a template multiplies the count.

Know that the Crown bears the onus. Commentary describes subsection 163(3) as requiring the Crown to prove its case, which is the reverse of the ordinary position in tax disputes.

But expect a civil standard. The Crown must prove it only on the balance of probabilities.

Read the current circular. Commentary reports a 2026 revision addressing concepts and subsections this article does not cover.

The Limits Of This Analysis

Several caveats matter. This is not tax or legal advice; any adviser facing a proposed penalty needs representation. Everything is stated as verified in August 2026 and requires confirmation. We did not obtain subsection 163.2(5) or any penalty computation provision, and this article deliberately states no dollar amount for either penalty. The definition of culpable conduct we obtained is truncated and we do not complete it. We did not obtain the statutory definitions of excluded activity or subordinate, and report one source's description of the first without verification. We did not obtain subsections 163.2(8) or (12), which a source lists among the operative provisions, and this article does not address them. We did not obtain the revised Information Circular IC01-1R2 and report only that commentary describes a 2026 revision. We did not read the judgment in Ploughman and take its findings from a single commentary source. We did not read the full Supreme Court decision in Guindon, relying on quoted passages and on commentary describing the procedural history. Several commentary sources carry near-identical wording across publications and are treated as one line of commentary. We did not establish whether the good faith reliance exception applies to the preparer penalty as well as the planner penalty. We did not research the interaction with professional body discipline, with civil liability to clients, or with the criminal offence provisions. All arithmetic is our own, uses assumed fee levels and hypothetical volumes to illustrate the effect of a per-statement penalty, and computes no penalty. The framing of the four verbs, the reading of the opinion cases, the facts-against-conclusions distinction and the audit examination structure are our own.

Related Reading

Compliance & Reporting The Voluntary Disclosures Programme The route back when something has already gone wrong, and what it does and does not relieve. Corporate Tax Renouncing What You Have Not Spent One of the arrangements named where the good faith reliance exception is said not to be available. Sales Tax Whose Expense Was It Another decision a professional firm makes on its client's behalf, with the consequence falling elsewhere.

Frequently Asked Questions

Who can be assessed a third-party penalty?

The preparer penalty reaches every person who makes, participates in, assents to or acquiesces in the making of a false statement that could be used by another person for a purpose of the Act. Commentary describes it as applying to third-party advisers including tax lawyers and accountants, and the provision itself refers simply to a person.

Does an honest mistake expose us?

The Supreme Court states the penalties are meant to capture serious conduct, not ordinary negligence or simple mistakes, and describes their purpose as deterring gross negligence or worse. That is a stated threshold from the highest court, and it is the first thing to hold on to when a penalty is proposed.

We got an opinion from a lawyer. Are we protected?

Not automatically. In Ploughman the court found that reliance on Ms Guindon's opinion did not fall within the good faith exception, alongside findings of ignorance of his own duties and failure to do his own due diligence. An opinion appears to help where it accompanies a real enquiry, not where it replaces one.

Do Charter protections apply?

No. Guindon held that section 163.2 penalties are not criminal in nature and do not impose true penal consequences, so section 11 does not apply. That removes the presumption of innocence and the criminal standard of proof as rights, though commentary notes the Crown still bears the onus under subsection 163(3).

How large is the penalty?

This article does not say, deliberately. We did not obtain subsection 163.2(5) or the penalty computation provisions, and a wrong formula in an article read by advisers would be worse than none. What the statutory text does show is that liability arises in respect of the false statement, singular, which suggests it attaches per statement.

We only reviewed the file, we did not prepare it. Does that help?

Not on the face of the provision. Its four verbs descend from making a statement to acquiescing in one, and acquiescence requires no positive act. Review and sign-off records are exactly where assent becomes documented, which is worth knowing before treating a quality control file as purely protective.

References

1. Guindon v Canada, 2015 SCC 41, [2015] 3 SCR 3, as published, on the appeal focusing on section 163.2 of the Income Tax Act, enacted in 2000, containing two administrative penalties being the planner penalty in subsection (2) and the preparer penalty in subsection (4), with the planner penalty not at issue in the appeal; on the text of subsection 163.2(4) reaching every person who makes, or participates in, assents to or acquiesces in the making of, a statement to, or by or on behalf of, another person that the person knows, or would reasonably be expected to know but for circumstances amounting to culpable conduct, is a false statement that could be used by or on behalf of the other person for a purpose of the Act, who is liable to a penalty in respect of the false statement; on the third party penalties being meant to capture serious conduct, not ordinary negligence or simple mistakes on the part of a tax preparer or planner; on proceedings of an administrative nature being primarily intended to maintain compliance or to regulate conduct within a limited sphere of activity; on the focus of the inquiry being not on the nature of the act but on the nature of the proceedings themselves, taking into account their purpose as well as their procedure; on the analysis of the process being concerned with the extent to which it bears the traditional hallmarks of a criminal proceeding; on the purpose of the proceedings being to promote honesty and deter gross negligence, or worse, on the part of preparers; and on criminal offences being found in Part XV, Administration and Enforcement, and prosecuted before a court of criminal jurisdiction. Note: a Supreme Court of Canada decision; we relied on quoted passages and did not read the decision in full. canlii.org
2. Canadian Accountant. Civil Penalties for Third-Party Tax Advisors, on the Tax Court of Canada case Ploughman v The Queen demonstrating how tax planners and preparers such as accountants may incur CRA third-party penalties; on Mr Ploughman's culpable conduct consisting of ignorance of his duties as a Trustee, failure to consult a knowledgeable Canadian tax lawyer as to whether retroactive dating is permissible under Canadian tax law, and failure to do his due diligence when giving out donation receipts for the 2001 tax year; on the Court finding Mr Ploughman's reliance on Ms Guindon not to fall under subsection 163.2(6); and on that subsection exempting advisers from the third party planner penalty when the adviser relied, in good faith, on information provided to the adviser by or on behalf of the other person. Note: a professional publication; we did not read the judgment and take these findings from this source alone. canadian-accountant.com
3. Rotfleisch & Samulovitch PC. Third Party Penalties Under the Income Tax Act: Analysis of Guindon v R, on section 163.2 being a tax penalty provision relating to third party tax advisors including Canadian tax lawyers and tax accountants, through which CRA can impose civil penalties on advisers who make false statements relating to tax matters or cause another person to make false tax statements; on Ms Guindon having been a lawyer primarily focused on family law and wills and estates with no expertise in income tax law who nonetheless agreed to provide a legal tax opinion on a donation programme; on the Tax Court having found her conduct culpable within the meaning of section 163.2 but vacated the assessment on the basis that the provision is criminal in nature and involves a true penal consequence; on the Federal Court of Appeal having overturned that decision; on the Supreme Court having upheld the Federal Court of Appeal on the basis that the penalty was not criminal in nature nor provided true penal consequences; and on the Court's statements that section 11 of the Charter applies to proceedings criminal in nature with true penal consequences, that a proceeding is criminal in nature when aimed at promoting public order and welfare within a public sphere of activity, and that administrative proceedings are primarily intended to maintain compliance or regulate conduct within a limited sphere of activity. Note: a tax law firm publication; its wording is near-identical to reference 4 and we treat the two as one line of commentary. mondaq.com
4. Canadian Accountant. Third Party Penalties Under the Income Tax Act, cited for the same statements regarding the procedural history of Guindon and the Supreme Court's reasoning on the distinction between criminal and administrative proceedings. Note: wording near-identical to reference 3; treated as the same line of commentary rather than independent corroboration. canadian-accountant.com
5. Gowling WLG. (2015). Tax Preparer Penalties Not Criminal Sanction: The SCC Judgment in Guindon, on the text of subsection 163.2(4); on culpable conduct being defined in subsection 163.2(1) as conduct, whether an act or a failure to act, that is tantamount to intentional conduct and shows an indifference as to whether the Act is complied with; on the reverse onus provision in subsection 163(3) requiring the Crown to prove its case in a preparer penalty assessment, so that there is a kind of presumption of innocence established in the Act and being presumed to have engaged in culpable conduct is not an issue; on the standard of proof in civil tax cases including penalties cases being balance of probabilities, a more relaxed standard than the criminal standard; and on the substantive issue in Guindon being whether a person assessed a preparer penalty is a person charged with an offence, engaging section 11 of the Charter. Note: a national law firm publication. The definition of culpable conduct as we obtained it is truncated and we do not complete it. gowlingwlg.com
6. AJAG. (2026, June). CRA's 2026 Update to IC01-1R2 Third-Party Penalties: What Canadian CPAs Need to Know, on CRA having revised Information Circular IC01-1R2, with the revised circular addressing the core concepts of culpable conduct, excluded activity and subordinate, and the operative subsections 163.2(1), (2), (4), (5), (8) and (12); on section 163.2 establishing a two-tier penalty system with the planner penalty in subsection (2) targeting those who make, furnish, participate in, or cause another to make or furnish a false statement in the course of a planning activity or valuation activity; and on the good faith reliance exception in subsection 163.2(6) not being available where a CPA is involved in an excluded activity, described as particularly relevant for those involved in the promotion or sale of tax shelters, flow-through shares, or other arrangements designed to deliver tax benefits. Note: an accounting firm publication dated June 2026; we did not obtain the revised circular itself, nor the statutory definitions of excluded activity or subordinate. ajag.ca

This article is provided for general informational purposes and is not tax or legal advice. It deliberately states no penalty amount, the computation provisions not having been obtained. The definition of culpable conduct relied on is truncated. The judgment in Ploughman was not read and its findings come from a single commentary source. The revised Information Circular referred to was not obtained. All arithmetic is the authors' own, illustrates the effect of a per-statement penalty using assumed volumes, and computes no penalty.