Canada KPMG Case a Wake-Up Call for Tax Advisers (Correct)

A court decision in Canada finding KPMG liable for professional misconduct over a tax avoidance plan is sending a strong message to tax advisers—spell out legal risks clearly to clients when approving their tax strategies.

The client in the case successfully sued KPMG for failing to warn him that his tax planning could be considered a tax avoidance strategy under Canada’s laws. KPMG was ordered to pay the client’s $2.9 million tax bill as a result.

“This decision should be a wake-up call to tax advisors,” Allan Lanthier, former partner at Ernst & Young and former chair of the Canadian ...