Revera Long Term Care – Federal Court requires CRA to reconsider whether a taxpayer’s negligence in over-reporting income in a statute–barred year permits CRA to reassess that year
The taxpayer discovered that it had overreported its income for ITA purposes by $9 million per year for years that were before the normal reassessment period. It requested that CRA reassess it for those years to exclude those amounts from its income - on the basis that the error was due to negligence so that such reassessments were permitted under s.152(4)(a)(i). CRA declined this request, based on a determination that the Minister did not have discretion under s.152(4)(a)(i) in situations where the taxpayer’s negligence leads to over-reported rather than under-reported income.
Ahmed J found CRA’s reasoning to be conclusory and agreed with the taxpayer that as CRA did “not conduct any textual, contextual, and purposive analysis as the Supreme Court of Canada requires” such decision was unreasonable and the request should be returned to CRA for a further decision.
Neal Armstrong. Summary of Revera Long Term Care Inc. v. Canada (National Revenue), 2019 FC 239 under s.152(4)(a)(i).