Melman – Federal Court of Appeal confirms a finding of gross negligence for failure of an executive to review a tax return with an unexpectedly low amount payable
An executive with financial acumen received a $15M dividend, deposited the estimated tax thereon of $4.7M to mature on the filing due date, did not review his return (which omitted the dividend) before signing and filing it, and promptly redeployed the $4.7M. Before confirming Bocock J's finding of wilful blindness as grounds for the s. 163(2) penalty, Dawson JA indicated that Bocock J had “articulated the correct legal test for establishing gross negligence: neglect beyond a failure to use reasonable care.”
Neal Armstrong. Summary of Melman v. Canada, 2017 FCA 83 under s. 163(2).