An Interview with Mark Tonkovich

Drawn to Tax

Mark Tonkovich is a partner with Blake, Cassels & Graydon LLP, with a practise focusing on tax litigation and dispute resolution. Tonkovich is strongly engaged in the tax community. He chairs the Tax Court Bench and Bar Committee, is a contributing editor to the journal Tax Litigation, and is a frequent speaker at events hosted by the Canadian Tax Foundation and the International Fiscal Association.

Tonkovich came out of law school hoping to further explore his interest in litigation. “I definitely had that interest on the civil litigation side coming right out of school. I thought it would be fascinating to be part of a team that gets to carefully design and carry out the kind of litigation strategies that I [imagined] this area of practice would be about—and I was right, for what it’s worth: I think this is a fascinating space to work in.”

He paired that desire to practice litigation with a passion for tax that he developed in law school. “I had a really top notch tax prof: Richard [W.] Bird, at UNB [University of New Brunswick], who’s since retired. That experience left me captivated [by tax law.] I kind of soaked up everything I could in the tax space while at school, and I knew that I wanted to have more experience in that on the practice side. And once I realized that you can grow a practice that’s focused on both of those elements – the advocacy elements and the more traditional problem solving and legal analysis that goes into tax – that’s it, I was hooked.”

Now, Tonkovich feels that he has been able to combine both of those passions in the work he does, maintaining a strong combination of both technical tax analysis and taxpayer advocacy in his tax dispute resolution practice.

Breadth of Perspective vs Depth of Process

Over the course of his career, Tonkovich has worked at three national or international law firms, the Department of Justice (DoJ), and as a clerk at the Federal Court of Appeal. That work experience has given him a broad perspective on differences in work and approaches to legal practice, and between the different sides of a tax dispute. It is the differences in the work being done, and in the mentors available to a young lawyer, that Tonkovich says make the biggest difference in the work environments.

“I think that the most important differences between those practice environments —especially for students or junior lawyers—it doesn’t really come from that higher level view of a firm’s 'culture', but from the people you work with… The differences that tend to have a greater or longer impact on how a young lawyer grows are really about the people.” Tonkovich has in mind not only coworkers’ positive attitudes and collegial natures – which are important – but: “more about the depth and strength of their legal skills, their practice experience, their natural curiosity in the law, and maybe even more just [their having a sincere] interest in the work that they’re doing.”

Private practice and the DoJ both have outstanding lawyers, but “what I saw, at least, of public practice suggested that there was probably more flexibility for lawyers to practice law on their own terms… As long as they were meeting the organization’s basic requirements and fundamental principles, there was more room to make [their] practice what [they] wanted it to be” in terms of specific personal and professional achievements.

Government legal employment has historically provided greater personal flexibility and early litigation experience: “On the DoJ side, there were certainly more opportunities to get on your feet early in the courtroom, early in your career, than there would be in comparable private practice setting…” While on-your-feet litigation experience is more difficult to come by early in one’s career at a large private law firm, efforts are made to seek out opportunities for juniors to get as much litigation experience as possible. Big law firms are also maturing in other ways, looking to provide greater flexibility to respond to how today’s young lawyers want to practice law. The large law firms that current students will enter will look and feel quite different than they did when Tonkovich began his practice, and even more different than they did a decade or two earlier than that.

On the differences in private and public tax practice, he continues: “But there’s a bit of trade-off as well: the DoJ represents the Crown in all manner of tax disputes – from very complicated cases to relatively straightforward cases, and opposite parties that have legal representation [falling] all along the spectrum – from self-represented individuals to tax litigators that practice at the highest levels of their field. That means that for the DoJ lawyers who are representing the Crown, you’re not always dealing with what some people consider to be the most interesting or most challenging cases.” But as public servants, lawyers at Justice also have a bit more latitude to work towards an outcome that could be seen as just or correct for both parties, while in private practice the emphasis is always placed on getting the best outcome possible for your client.

However, there are several important advantages to practising tax controversy at a private firm. Litigators at Justice tend to only get involved in a case when it is already on its way to trial. By contrast, “on the private practice side I work regularly, on a daily basis, at every stage of the dispute resolution process. That includes where clients are still figuring out what to do, or how to carry out a transaction, or considering whether they have tax exposure and what tax litigation might look like in the future. It includes active audits by different Canadian tax authorities, administrative disputes and administrative appeals, alternative forms of dispute resolution with the tax authorities outside of the formal court process, and in-court litigation where that’s the best way to work to resolve the dispute.

I think that [this] breadth of practice gives private sector tax lawyers a much broader, what I like to call, 'tax litigation toolbox.' Having that perspective and being able to use all of these different tools and different avenues to help our clients forward with their disputes, I think that’s really critical to being able to provide the best legal representation we can.”

The Changing Tax Landscape

Tonkovich says that it’s very easy for him to get captivated by the cases he and his colleagues take on. Although every case raises interesting issues and facts, the tax disputes Tonkovich works on are some of the “most important legal disputes for those particular clients or client teams.” Bringing a matching level of effort and attention to every case, and knowing its issues and details inside out, is something that Tonkovich says is crucial to being a successful litigator.

Though Tonkovich finds the facts of each case absorbing for their own merits, he says that his favourite cases are often those that “involve brand new interpretations of the law. I’ve actually seen quite a few of those kinds of cases—including cases under the GAAR (the General Anti-Avoidance Rule), international tax treaty issues or transfer pricing issues… disputes involving the scope of regulatory powers, or disputes that question or reflect the CRA revisiting tax rules or practices that the tax community thought were clear and well understood… even after many years of following a particular practice.”

The number of cases like this are rising. Legislation and government enforcement respond to democratic pressures, and tax disputes are garnering increasing attention in the media and in popular discourse. “I’ve come into tax practice at a very interesting time because there has been an increasing amount of… investment in resources, and public attention, frankly on tax issues. International tax issues especially, but all manner of tax issues. There is media coverage now of cases and disputes that, even 10 or 15 years ago, I really don’t think we saw anywhere near the same level.”

Increased public attention on tax planning and tax disputes has knock-on effects for tax litigators. “Because of the amount of interest and the resources that have gone into these types of tax projects—and vastly increased investments in Canada, for example, in the tax authorities, and their personnel, and the way that they’re able to do their audit and their compliance work—it naturally trickles into growth when it comes to tax controversy.” In addition to using increased federal funding to conduct more audits, auditors are taking more aggressive stances on tax reassessments: “we’re seeing a lot more creative interpretations from auditors—and even revisiting of well-established interpretations [of tax law and transactional practices]. All of that is going to mean we’re going to see even more activity and movement in the tax controversy space.”

Advice for Students

Tonkovich sees tax controversy as a clear growth area with much opportunity for interested law students and junior lawyers, whether they want to pursue employment in the private or public sector. For students who are interested in the tax controversy space, Tonkovich has a few pieces of advice, most importantly: reach out, get involved, and don’t be intimidated. “This is a community… the tax bar itself is very encouraging of young lawyers or of students who are interested in getting into this field.”

“My biggest recommendation would be for those students who are interested in this space, or think they might be: reach out and meet the people who work in this space, and see if you can get involved in different [tax] organizations.” Tonkovich recommends doing what he did as a student: “go for coffees, attend meetings, participate in different organizations, groups, and seminars, and [seek out] writing opportunities to learn more about this area of law, and to learn more about the tax bar.”

“Once you get to a certain point, get involved in writing and attending conferences and speaking opportunities. It’s a really good way not to only get to know others out there and to learn from their experiences, and how that might help you appreciate and grow your own practice. It’s also a great way to get your name out there, and to contribute to thought leadership: participation in these different organizations that ultimately helps to build a fairer and better-functioning tax system…”

And finally, anyone who is or thinks they may be interested in tax shouldn’t be worried about its reputation as a difficult field. “I would also say: don’t be intimidated, because there are several areas of the law that are quite complex as a matter of black letter law… I think I mentioned [earlier] that that was one of the things that attracted me to tax law… If you think you have an interest in it, and you’re willing to put in the time and the effort, then there are going to be moments when it just 'clicks'.”

It may take more than a single summer, or even a few years, of work in tax for it to click, but when it does, “you’re really able to participate, and that can be very rewarding in itself… I love this area of the law. I still find it fascinating, and the very things that attracted me to this [field] in the first place are still very much a daily part of my practice.”