Taxpayer made contributions to his registered retirement savings plan (RRSP), paying attention to deduction limit statement attached to his notices of assessment. CRA concluded that taxpayer had ongoing cumulative excess amount in respect of his RRSP. Minister assessed taxpayer for tax under s. 201.4(2.1) of Income Tax Act on RRSP overcontributions and imposed late-filing penalties for failure to file forms required by s. 204.3(1)(a) of Act. Taxpayer appealed. Appeal allowed in part. Taxpayer prepared his own income tax returns, using commercial software program, and mistakenly believed that he had deducted his contributions during two taxation years in which such deductions did not appear on his income tax returns. Taxpayer was conscientious taxpayer who was reasonably endeavouring to contribute and deduct appropriate amount each year and his failure to deduct contributed amounts was due to innocent and reasonable inadvertence. In one year, taxpayer purported to claim deduction in amount exceeding his deduction limit such that he had undeducted contribution in amount of $1,660. Due to these RRSP-related errors, taxpayer had aggregate undeducted contributions in amount of $10,229.62. Part X.1 tax on RRSP over-contributions that was assessed against taxpayer was properly payable. As taxpayer was genuinely and reasonably of view that he had not made any overcontributions, he did not realize need to file return pursuant to s. 204.3(1)(a) of Act. Taxpayer’s failure to file such forms resulted from reasonable error of fact so as to be excused by due diligence defence and late-filing penalties should be cancelled.
Chiang v. The Queen (2017), 2017 CarswellNat 4300, 2017 TCC 165, Don R. Sommerfeldt J. (T.C.C. [Informal Procedure]).