Spence v. Canada Revenue Agency 2012 FCA 58
Income Tax - Returns, assessments, payment and appeals - Interest - Waiver
A taxpayer had his 2006 tax return prepared by H&R Block and was told he would get a refund. He signed the return and it was sent in without the taxpayer looking it over. In 2008, the Canada Revenue Agency (CRA) reassessed the 2006 return, resulting in a finding that he had failed to report income and thus received an overpayment of the refund ($123.98). The CRA imposed penalties and interest of $7,623.85. H&R Block conceded that it was their error. The taxpayer challenged the penalty under the fairness provision of the Income Tax Act (s. 220(3.1)). The Fairness Committee of the CRA denied his request because there were no extraordinary circumstances as described in Information Circular IC07-1 (Taxpayer Relief Provisions). The taxpayer applied for judicial review.
The Federal Court, in a decision reported (2010), 382 F.T.R. 1, allowed the application, holding that the Committee erred by treating the Information Circular as binding and sent the taxpayer’s request back to the Committee for reconsideration. The Committee again turned down the taxpayer’s request, holding that it was his responsibility to ensure the accuracy of his return even if it was completed by a professional tax preparer. The taxpayer applied for judicial review.
The Federal Court, in a decision reported 388 F.T.R. 43, dismissed the application. The court found no reason to overturn the Committee’s decision. The decision was reasonable. The taxpayer appealed.
The Federal Court of Appeal dismissed the appeal.