Section 160 of the Income Tax Act (the “Act”) broadens the power of the Canada Revenue Agency (CRA) to collect on income tax debts. Under section 160, if a person receives property from a tax debtor (the transferor), the transferee may inherit derivative tax liability. In other words, the taxpayer can become responsible for the tax debtor’s income tax bill and the CRA can now pursue the transferee with its full gamut of tax collection powers (e.g., withholding income tax refunds and GST/HST credits, garnishment, debt registration, lien, asset seizure, etc.). This CALU Report was written by David Rotfleisch, CPA,CA, JD of Rotfleisch & Samulovitch P.C.
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