Cybernius – Federal Court orders the Minister to make a taxpayer-requested s. 221.2(1) transfer between two taxpayer accounts

S. 221.2(1) gives CRA the discretion to transfer amounts between different tax accounts of a taxpayer. CRA refused a taxpayer request to transfer a credit balance respecting the taxpayer’s Part I tax – which had arisen because CRA had garnished amounts to collect an arbitrary assessment for some taxation years which later turned out not to have any significant Part I tax liability – to satisfy its arrears of source deduction remittances. McVeigh J found that CRA had acted unreasonably in not granting this request – which initially had been refused on the grounds that at the time of the request, a subsequent year’s return was overdue – given that by the time the matter came before her, the taxpayer was no longer delinquent in its filing obligations – and effectively ordered CRA to grant the transfer request.

Neal Armstrong. Summaries of Cybernius Medical Ltd. v. Canada (Attorney General), 2017 FC 226 under s. 221.2(1) and s. 225.1(1).