Delay allowed more interest to be added to tax debt, which was purely choice made by taxpayer

Tax - Income Tax - Administration and enforcement

Taxpayer claimed that, but for long audit process, he would not owe interest because he would have used his 2006 allowable business investment loss (ABIL) to negate tax debt for 2003 tax year. Minister of National Revenue’s delegate partially allowed taxpayer’s reconsideration request for taxpayer relief from penalties and interest. Taxpayer brought application for judicial review of Minister’s delegate’s decision to overturn interest charges with respect to 2003 tax year. Application dismissed. Decision was reasonable. Minister’s delegate could reasonably find there was no delay by CRA justifying relief from interest. Minister’s delegate took into consideration issues taxpayer raised regarding length of time taken by CRA to process his 2003 tax return. Passage of extended amount of time was not necessarily same as “delay”. Steps that taxpayer took and those pursued by CRA in response each took time to initiate and complete. Taxpayer did not file his claim apply his 2006 ABIL to his 2003 tax year until 2011. Minister’s delegate was aware of taxpayer’s argument that he could not make his ABIL claim any earlier than he did, and rejected it. Decision was not based on incorrect fact. Taxpayer did not file request to carry back 2006 ABIL in 2009 when his taxes were reassessed but waited until 2011 to file claim. This delay allowed more interest to be added to tax debt, which was purely choice made by taxpayer.

Shea v. Canada (Attorney General) (2019), 2019 CarswellNat 2405, 2019 CarswellNat 3610, 2019 FC 787, 2019 CF 787, E. Susan Elliott J. (F.C.).

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