The predominant purpose test, established by the Supreme Court of Canada in R. v. Jarvis and R. v. Ling, determines when a CRA inquiry has shifted from a civil audit to a criminal investigation. The CRA can compel documents and information during an audit without a warrant, but those broad powers do not extend to gathering evidence for a prosecution.
Once the predominant purpose of the CRA's inquiry becomes the determination of criminal liability, the taxpayer is no longer required to comply with the agency's audit demands, and protections under the Canadian Charter of Rights and Freedoms — including the protections against self-incrimination and unreasonable search and seizure — apply. Identifying this turning point is critical, because cooperation that continues past it can produce evidence used in a criminal case.