Detecting an abusive tax planning strategy can be very difficult, given the complexity of the legal framework on which such strategies are based and the need for in-depth examination of the tax returns filed by taxpayers.

The normal prescribed period of three or four years, as the case may be, is often not enough, particularly because of the sophistication of the transactions being investigated.

In order allow us enough time to identify abusive tax planning strategies to which the general anti-avoidance rule (GAAR) applies, the law authorizes us to make a reassessment of income tax within six years following the day the notice of original assessment was sent to the taxpayer. The period is extended to seven years where the taxpayer is a mutual fund trust or a corporation other than a Canadian-controlled private corporation.