Moore – Tax Court of Canada vacates the penalty assessed on a careful Canadian for late-filing a T1135
The taxpayer (Mr. Moore) realized approximately a year late that he should have filed a T1135 form to report some U.S. shares that now exceeded the $100,000 threshold, and promptly filed the T1135 with CRA.
In allowing Mr. Moore’s appeal of the $2,500 penalty imposed for the late-filing of the 2015 form, Boyle J indicated that even a careful and otherwise-compliant Canadian like Mr. Moore would find the disclosure in the CRA Guide as to T1135 reporting requirements to be opaque, noted the implicit presence of a due diligence defence, and stated:
I would ask the rhetorical question, “Is Mr. Moore’s disclosure to CRA on a voluntary basis of his failure to file a 2015 information return not the type of compliance effort CRA wants to encourage Canadians to follow?” …
I cannot imagine why in a case such as this the CRA would prefer to have Mr. Moore appeal to this Court, lose, and then go back to CRA’s Fairness Review program armed with my comments.
Neal Armstrong. Summary of Moore v. The Queen, 2019 TCC 141 under s. 162(7).