For Christopher Ellett, the Panama Papers were not necessarily the bombshell they have been made out to be in the media. “A smaller disclosure a few years ago made it clear that the banking laws of many tax havens facilitated tax evasion,” he says, adding that “aside from the specific individuals involved, which are still being identified, I don’t think the Panama Papers revealed any great surprises.” Ellet recently graduated from the Peter A Allard School of Law with an LLM in Taxation, and currently works as a barrister and solicitor at Moodys Gartner Tax Law in Calgary.
“Tax is one area where you must be continuously learning, either because of legislative changes, CRA interpretations, judicial decisions, or to re-familiarize yourself with certain provisions or pitfalls,” he says.
In fact, this is why Ellett—who holds a BA from the University of Victoria and a Bachelor of Laws from the Allard School of Law (Class of 2007), in addition to one from Queen Mary, University of London (UK)—decided to undertake an LLM in Taxation.
“I practiced in general civil and corporate litigation for several years, successfully dealing with a broad range of disputes,” he says. “After considering my long term career goals, I decided to shift my practice toward tax and estate law.”
“Not having been exposed to much tax law in practice, I wanted to obtain a broad base of tax knowledge as quickly as possible. The Tax LLM program [at Allard Law] was a great opportunity to immerse myself in tax with like-minded people and quickly transition into a tax practice.”
Ellett cautions though that there is a common misconception about what tax lawyers actually do for their clients.
“There is often some confusion among the roles of a tax lawyer and a tax accountant,” he says. He adds that being “good with numbers” or having an accounting background might be beneficial to tax lawyers, “but the primary competencies are similar to other areas of legal practice.”
“Tax issues are also rarely an isolated part of a client’s objective. The solutions you provide have to compliment the client’s broader goals,” he says, which may involve high value commercial transactions, estate plans or even a divorce.
However, this overlap with other areas of law and the constantly changing nature of tax legislation are part of the challenge that drew Ellett to tax in the first place. For students or lawyers looking to develop their knowledge of tax law, Ellett recommends an LLM in Taxation as a way in.
“I greatly enjoyed the program, and it was fun to be back in an academic environment,” he says. “Practice in tax is challenging, but working in a tax firm along with my years of legal experience has made the transition much easier.”
So what does a tax lawyer think Canada should be doing differently in response to the Panama Papers?
“The CRA should continue its efforts to reduce evasion through tax havens, but it should do so in a way that protects taxpayers’ rights and makes compliance less onerous,” he says. “Some of the proposed legislative changes require self-assessment of technical rules, which can often be a complicated and uncertain determination even with professional advice. There are some serious risks that the net has been cast too broadly and otherwise compliant taxpayers will
be subject to significant penalties.”
One risk, despite CRA assurances to the contrary, is that information may be used by other countries for non-tax purposes, including criminal investigations, or that taxpayers may disclose additional information without knowing they are under investigation. While Canadian law has some protections in place designed to allow taxpayers to voluntarily disclose information for tax purposes without it being otherwise used against them, not all countries will maintain this division.
Ellett emphasizes that regardless of what changes are made in light of the Panama Papers, tax lawyers have a chance to contribute to the overall aims of reducing bank secrecy and increasing taxpayer compliance.
“There is an opportunity for lawyers to take on a larger role in protecting the public and shaping these enhanced regulations.”