Reasonable for CRA not to grant waiver of penalty for late filing of same form two years in row

Tax - Income tax - Administration and enforcement

Taxpayer, who owned foreign property worth more than $100,000 during 2015 tax year, filed foreign income verification statement (Form T1135) 49 days late and was assessed late-filing penalty of $1297.42. Taxpayer’s first taxpayer relief request under s. 220(3.1) of Income Tax Act was denied. Taxpayer’s second relief request was denied. Taxpayer applied for judicial review. Application dismissed. Taxpayer argued that request was unreasonably refused because she relied on misinformation from CRA, through individual tax enquiries line, that she could file tax return late without penalty since she had no tax owing. Taxpayer’s nuanced arguments that two forms of tax return and foreign income verification statement were same single “tax action” were not squarely before decision-maker and, more importantly, she had been given roadmap regarding filing of T1135 in year before. Taxpayer had experienced same problem year before so it was inconceivable that she did not understand that these two documents being filed late had different consequences and were not same thing. Decision to refuse relief request was not unreasonable because of advice given about filing of T1 return, as taxpayer should have asked about treatment of late T1135 . It was reasonable for CRA not to grant waiver of penalty for late filing of same form two years in row, as past compliance was identified as relevant factor. Taxpayer did not meet test of extraordinary circumstances given that she knew she would be away from home for several months during period and could have arranged to obtain necessary information to meet filing deadline.

Chen v. Canada (Attorney General) (2019), 2019 CarswellNat 6590, 2019 FC 1435, Glennys L. McVeigh J. (F.C.).

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