John Tavares is fighting an $8M CRA tax bill. Ottawa tells court he must pay

The federal government is requesting Toronto Maple Leafs Captain John Tavares’ $8-million tax dispute with the Canada Revenue Agency be dismissed.

The federal government is pushing back against John Tavares’ $8-million tax dispute with the Canada Revenue Agency, arguing the Toronto Maple Leafs captain is offside.

In a reply to Tavares’ appeal with the Tax Court of Canada, the Attorney General of Canada (AGC) is disputing Tavares’ ask to have the CRA’s reassessment of his 2018 tax return annulled.

The CRA, according to Tavares’ appeal filed in January, determined his 2018 income was $17.8 million higher than reported, and ordered the player to pay $6.8 million in taxes — over 38 per cent — plus $1.2 million in interest.

The 33-year-old from Mississauga, Ont., signed a seven-year, US$77-million contract to join the Leafs on July 1, 2018. He previously played for the New York Islanders from 2009 to 2018.

The $17.8-million sum accounts for a US$15.25-million signing bonus in the contract’s first year, and “was integral to Tavares’ decision” to accept the deal, his appeal states.

The court document added Tavares’s signing bonus “was an inducement to sign an agreement relating to the performance of an athlete,” and should not be considered as salary or wages.

The AGC took issue with that in its reply filed late last month.

“With respect to the entirety of the Notice of Appeal, the Attorney General of Canada (AGC) denies that any amount referred to as a ‘signing bonus’ was a signing bonus or an inducement payment,” it reads in part.