1680169 Ontario - Federal Court finds that it was not unreasonable for CRA to decline to waive interest attributable in part to failings of a third party (the company’s accountant)
An applicant for interest and penalty relief had filed returns for its 2009 to 2013 taxation years in April 2015. CRA granted partial interest relief for the 2009 and 2010 returns, on the basis that it was not until 2010 that the applicant began to be aware of substantial failings of its new accountant. The applicant attributed its substantial further delay in filing the returns to the difficulties of reconstructing its financial records after turning to yet another accountant for assistance. In finding that it was not unreasonable for CRA to deny further relief, Dinar J stated:
[T]he Minister’s Delegate …reasonably concluded that the Applicant’s circumstances were not “beyond its control”.
… [T]his Court has held that even when penalties were assessed as a result of accountant error, the Minister is not required to exercise her discretion … . The fact that the Applicant made attempts to remedy the situation by reconstructing financial statements which took a significant amount of time does not render the Decision unreasonable.
Neal Armstrong. Summary of 1680169 Ontario Limited v. Canada (Attorney General), 2019 FC 562 under s. 220(3.1).