Assumptions are like any powerful tool: they tend to be over-used and often abused
Assumptions of law should not be plead:
 I agree that legal statements or conclusions have no place in the recitation of the Minister's factual assumptions. The implication is that the taxpayer has the onus of demolishing the legal statement or conclusion and, of course, that is not correct. The legal test to be applied is not subject to proof by the parties as if it was a fact. The parties are to make their arguments as to the legal test, but it is the Court that has the ultimate obligation of ruling on questions of law.
Canada v. Anchor Pointe Energy Ltd., 2003 FCA 294 (CanLII)
Auditors can make assumptions, but what about appeals officers?
Former Chief Justice Bowman thought:
28 … there are additional reasons for not saddling the taxpayer with the onus of disproving new " assumptions " that the Minister has come up with at the objection level. It is a simple matter of procedural fairness. The cards are already stacked in favour of the Crown, with the presumption of correctness of assessments, the Crown's right to plead unproved assumptions and the reverse onus of proof. I see no reason for stacking the cards any further by extending that reverse onus to " assumptions " made at the confirmation stage .
Anchor Pointe Energy Ltd v. The Queen , 2006 TCC 424 (CanLII)
In The Queen v. Friedberg 92 DTC 6031, Linden J.A. speaking for the Court said:
In tax law, form matters . A mere subjective intention, here as elsewhere in the tax field, is not by itself sufficient to alter the characterizations of a transaction for tax purposes. If a taxpayer arranges his affairs in certain formal ways, enormous tax advantages can be obtained, even though the main reason for these arrangements may be to save tax (see The Queen v. Irving Oil 91 DTC 5106, per Mahoney, J.A.). If a taxpayer fails to take the correct formal steps, however, tax may have to be paid. If this were not so, Revenue Canada and the courts would be engaged in endless exercises to determine the true intentions behind certain transactions. Taxpayers and the Crown would seek to restructure dealings after the fact so as to take advantage of the tax law or to make taxpayers pay tax that they might otherwise not have to pay. While evidence of intention may be used by the Courts on occasion to clarify dealings, it is rarely determinative. In sum, evidence of subjective intention cannot be used to "correct" documents which clearly point in a particular direction.
The Supreme Court of Canada has made it abundantly clear that the CRA has broad sweeping powers when conducting civil tax audits because not everyone wants to pay their taxes
However , broad powers are not the same as unfettered powers.
The CRA must act reasonably, professionally, and use their civil audit powers only for civil audits – not for conducting audits when they have an ‘investigative mindset’ and are considering criminal prosecution