Gekas – Federal Court finds that CRA’s denial of relief from penalty tax on TFSA over-contributions relating to errors of the financial institution was unreasonable
S. 207.06(1) indicates that the Minister may waive the tax on an excess TFSA contribution where “the individual establishes to the satisfaction of the Minister that the liability arose as a consequence of a reasonable error” and the excess (together with any income thereon) is distributed “without delay.” The individual made two excess contributions of $10,000 each to his TFSA in 2016 due to his financial institution garbling instructions that he had given. Immediately on finding out about these over-contributions (when he was assessed by CRA), he withdrew those excess amounts.
Boswell J remitted the matter for redetermination by a fresh CRA delegate, stating:
[T]he Delegate’s decision is unreasonable because it did not fully assess the extent to which the excess contributions resulted from the mistakes of persons other than the Applicant.
Neal Armstrong. Summary of Gekas v. Canada (Attorney General), 2019 FC 1031 under s. 207.06(1).