Report: Maple Leafs’ captain and Ontario native bid farewell in a significant legal dispute

Former Toronto Maple Leafs captain and Ontario native is currently involved in a major legal dispute with the Canada Revenue Agency (CRA) that could impact his financial situation, his future with the Leafs, and his overall standing in the NHL. According to reports, including from Hunter Crowther of CTV News, the CRA is seeking the repayment of the $15.25 million signing bonus Tavares received when he signed his seven-year, $77 million contract with Toronto in 2018.

The ongoing legal battle, which has lasted nearly a year, hinges on how the signing bonus should be taxed. Despite being a Canadian citizen, Tavares was considered a U.S. taxpayer when he signed the contract, due to his residency in the U.S. while playing for the New York Islanders. The CRA argues that the signing bonus should be treated as regular income, which would subject it to a tax rate of over 50%. Tavares, however, contends that under the Canada-U.S. Tax Treaty, he should only be taxed at 15%, as he was a U.S. resident performing in Canada for the first year of his contract.

The case has already gone through the courts, with an initial ruling against Tavares. A final decision is still pending. Should Tavares lose, he may owe up to $8 million in back taxes, which could prompt him to consider leaving Toronto for a U.S.-based team with more favorable tax conditions. This could also affect whether Tavares signs a contract extension with the Leafs after his current deal expires next July.

As of now, Tavares has one year left on his contract, and Toronto may face tough decisions, including the possibility of a trade before the deadline or allowing him to leave as a free agent.