Docket: T-1962-15
Citation:
2016 FC 953
Ottawa, Ontario, August 22, 2016
PRESENT: The
Honourable Madam Justice Gagné
|
BETWEEN:
|
|
JOHN C. HERRINGTON
|
|
Applicant
|
|
and
|
|
CANADA REVENUE
AGENCY
|
|
Respondent
|
JUDGMENT AND REASONS
I.
Nature of the Matter
[1]
Mr. John Herrington [the Applicant] brings this
application for judicial review of a decision made by a Team Leader of the
Taxpayer Relief Centre of Expertise, which is part of the Appeals Branch of the
Canada Revenue Agency [CRA]. The Team Leader denied the Applicant’s request to
reconsider the first taxpayer relief decision. In that decision, another CRA
Team Leader denied the Applicant’s request for the cancellation of penalties
and arrears interest assessed for the 2012 and 2013 tax years, on the basis of
a lack of extraordinary circumstances.
[2]
In assessing the Applicant’s written and oral
submissions, I have considered the fact that he is self-represented and that I
should allow his pleadings considerable latitude. However, this does not give
him any additional rights (Sauve v Her Majesty the Queen, 2011 FC 1081
at para 14; aff’d 2012 FCA 287 at para 6). I have also chosen to ignore several
unjustified sarcastic and accusatory comments that we find in his Memorandum of
Fact and Law and that he made during the hearing towards counsel for the Respondent
and towards the Court.
II.
Preliminary Remark
[3]
The Applicant hereby requests the following
remedies: i) relief from penalties incurred in 2012 and 2013; ii) refund plus
interest; and iii) $10,000 in expenses related to seeking a judicial review.
[4]
However, subsection 18.1(3) of the Federal
Courts Act, RSC 1985, c F-7, provides that on an application for judicial
review, this Court only has the power to:
(a) order a federal board, commission or
other tribunal to do any act or thing it has unlawfully failed or refused to do
or has unreasonably delayed in doing; or
(b) declare invalid or unlawful, or quash, set
aside or set aside and refer back for determination in accordance with such
directions as it considers to be appropriate, prohibit or restrain, a decision,
order, act or proceeding of a federal board, commission or other tribunal.
[5]
When applying subsection 18.1(3)(b), I am
not called upon to exercise the discretion conferred on the Minister by the Income
Tax Act, RSC 1985, c 1 (5th Supp) [ITA], nor to substitute my
own decision for that of the Minister. Rather, my review is limited to the
manner in which the Minister exercised her discretion (Sutherland v Canada (Canada Customs and Revenue Agency), 2006 FC 154 at para 20.
III.
Facts
[6]
The Applicant’s 2009, 2011, 2012 and 2013 income
tax returns were reassessed by the CRA due to omitted investment income. No
penalties were levied for the 2009 taxation year as it was the first omission
in a four-year period, but the Applicant was assessed $8.51 of arrears interest.
[7]
With respect to the omissions in the 2011, 2012,
and 2013 taxation years, the following penalties and interest were levied
against the Applicant:
· In 2011, the
Applicant omitted to declare T3 slips from TD Canadian Money Market Fund and
Ishares Global Gold Index Fund, totalling $882.00. The Applicant was assessed
$176.40 for omission penalties and $14.06 of arrears interest. The Applicant
applied for relief from those penalties and interest under the Taxpayer Relief
Provisions. On June 26, 2014, the Applicant’s penalties and interest were
cancelled.
· In 2012, the
Applicant omitted to declare T5 slips from TD Greenline for $2,303.00. The
Applicant was assessed $460.40 for omission penalties and $12.03 of arrears
interest.
· In 2013, the
Applicant omitted to declare T5 slips from TD Greenline for $1,617.00. The
Applicant was assessed $323.40 for omission penalties and $19.67 of arrears
interest.
[8]
The Applicant paid the penalties and arrears
interest in full, shortly after the issuance of the respective Notices of Reassessment.
[9]
However, he subsequently submitted a Request for
Taxpayer Relief with respect to the penalties and interest for the 2012 and
2013 taxation years [the “First Level Request”].
The Applicant indicated that there were “other
circumstances” justifying his request: his T5 slips for 2012 and 2013
were delivered to his old mailing address, and thus he never received them. He
had advised TD Bank of his new address, and TD Bank in turn had sent the
address change to TD Greenline, their investment group. However, TD Greenline
had not yet updated the Applicant’s address on file. The Applicant stated that
he had done his due diligence by contacting the CRA on March 3, 2014, to
request all of his 2013 information slips. However, a CRA call centre agent
later advised him that it did not receive his 2013 T5 slip until March 15,
2014.
[10]
A Tax Services Agent prepared a Taxpayer Relief
Report, which recommended denying the First Level Request. The Report noted
that the Applicant should have been more diligent in reporting all of his
income after his 2011 tax return was reassessed and penalties were levied for
failure to report income. A CRA Team Leader approved the recommendation to deny
the Applicant’s First Level Request, and sent the decision letter to the
Applicant.
[11]
The Applicant made a second Request for Taxpayer
Relief (the “Second Level Request”), with respect
to the penalties and interest levied for the 2012 and 2013 taxation years.
Again, the Applicant stated that there were “other
circumstances” justifying his request: TD Bank had confirmed that the
address change request it had sent to TD Greenline had been “lost in the mail”. The Applicant argued that these
circumstances were beyond his control.
[12]
A second Tax Services Agent prepared a Taxpayer
Relief Report, which recommended denying the Second Level Request. The Report
acknowledged that the lost mail was beyond the Applicant’s control, but found
that these circumstances did not reasonably prevent the Applicant from
disclosing all of his income on the initial tax filing.
IV.
Impugned Decision
[13]
Another CRA Team Leader approved the
recommendation to deny the Applicant’s Second Level Request, exercising her
discretion pursuant to subsection 220(3.1) of the ITA. In her decision letter,
the Team Leader agreed with the Applicant that the fact that TD Greenline did
not have his updated mailing address was beyond his control. However, she could
not conclude that this “reasonably prevented [him] from
reporting an accurate and complete income tax return by the respective due
date”. The Team Leader acknowledged that the Applicant had contacted CRA
on March 3, 2014, to obtain his 2013 information slips, but found that “after repeated omissions for similar income, it is reasonable
to expect an individual to ensure that the information slips at hand reflects
the financial situation.”
V.
Issues and standard of review
[14]
This application for judicial review raises the
following issues:
A.
Did the CRA Team Leader err in deciding not to
waive or cancel penalties and interest levied against the Applicant?
B.
Should costs be awarded?
[15]
The standard of review of a discretionary
decision of the Minister under subsection 220(3.1) of the ITA is reasonableness
(Canada Revenue Agency v Telfer, 2009 FCA 23 at para 24). Accordingly,
this judicial review is limited to reviewing the manner in which the Team
Leader exercised her discretion (Sutherland above at para 20).
VI.
Analysis
A.
Did the CRA Team Leader err in deciding not to
waive or cancel penalties and interest levied against the Applicant?
[16]
The Applicant’s Memorandum of Fact and Law does
not contain legal arguments. Essentially, the Applicant disagrees with the Team
Leader’s decision not to waive the penalties and interest. He argues that he
was responsible in filing his taxes and that the penalties and interest should
be waived due to circumstances that were beyond his control, i.e. the lost mail.
[17]
He better articulated his position during the
hearing. He blames the Respondent’s computer system for not having provided him
with advanced warnings that one of the T5 slips received by the CRA from TD
Greenline, which matched his Social Insurance Number, was missing from both his
2012 and 2013 income tax returns. In other words, the Applicant argues that the
duty of care the CRA owes Canadian taxpayers (Leroux v Canada Revenue Agency,
2014 BCSC 720) includes an obligation to inform them every time a T3 or T5
slip, a copy of which is eventually sent by financial institutions to the CRA,
is missing from that taxpayer’s income tax return. The Applicant wants to
change the ITA and CRA’s system so penalties are levied only if a proper
warning was provided to the taxpayer.
[18]
The focus of subsection 220(3.1) of the ITA is rather
whether relief should be granted due to extenuating circumstances beyond the
control of the taxpayer that would have prevented him from complying with the ITA
(Stemijon Investments Ltd v Canada (Attorney General), 2011 FCA 299 at para
50).
[19]
I agree with the Respondent that the Team
Leader’s decision was reasonable.
[20]
First, it was reasonable for the Team Leader to
conclude that there were no extraordinary circumstances beyond the Applicant’s
control which prevented him from complying with his obligation to report all of
his income when filing his income tax returns. Given the Applicant’s similar
omissions of investment income in the past, it was reasonable for the Team
Leader to expect that he would ensure that the information slips he filed
accurately reflected his investment portfolio. The responsibility to include
all of a taxpayer’s revenue earned during a year belongs to that taxpayer and
it cannot be transferred on the CRA just because the latter is eventually
provided with a copy of the T3 and T5 slips issued by financial institutions.
[21]
Second, the Team Leader considered all
representations made by the Applicant in reviewing the Second Level Request,
and did not rely on irrelevant considerations. Thus, the Team Leader’s decision
falls within the range of possible and acceptable outcomes and she rendered a decision that is transparent, justifiable and
intelligible (Dunsmuir v New Brunswick, 2008 SCC 9).
B.
Should costs be awarded?
[22]
In his Notice of Application, the Applicant
asked for $10,000 in costs, but does not specify such an amount in his
Memorandum of Fact and Law, in which he asks only for “costs”.
[23]
The Respondent asks for costs in this
application.
[24]
I find that costs should be awarded to the
Respondent, given the result of this proceeding (Rule 400(3) of the Federal
Courts Rules, SOR/98-106).
VII.
Conclusion
[25]
This application for judicial review is
dismissed, with costs awarded to the Respondent in the amount of $500,
inclusive of all disbursements and taxes.
Email this Content