CRA acknowledges the onus on it to justify assessing T1135 penalties outside the normal statute-barring periods

Notwithstanding that CRA acknowledges that assessing a s. 162(7) penalty for failure to file T1135s for periods before the normal reassessment period (as potentially extended by three years under s. 152(4)(b.2)) would require CRA to demonstrate that such failure “was an error that a prudent and conscientious person would not have made” (which often would be difficult for CRA to do where there were few records or memories), CRA nonetheless states that in order for failure to file T1135s to be exonerated under the voluntary disclosure program, “the taxpayer would have to complete the T1135 for all years for which such filing was required.”

This was position was formulated even before the more recent trend towards providing less encouragement to taxpayers to make voluntary disclosures.

Neal Armstrong. Summaries of May 2016 Alberta CPA Roundtable, Q.17 under s. 152(4)(a)(i) and s. 220(3.1).