Loyer Succession – Federal Court allows review application for failure of CRA to consider a penalty-waiver agreement of the ARQ for the same unreported income

The estate of a suspected drug dealer, who had been murdered, was assessed by the ARQ for income that he had not reported. CRA followed suit with assessments made on the same basis – but CRA did not follow the ARQ’s lead when the latter agreed with the estate to waive all gross negligence penalties - and did not even mention the Agreement to this effect between the estate and the ARQ in its second level review of the estate’s request under s. 220(3.1) for relief. Before remitting the matter to another delegate for redetermination, LeBlanc J stated:

[The estate] has the right to see the Agreement considered and to know why it was not applied in this case, if that was the CRA viewpoint. The failure to do neither … had the effect… of “depriving the process of justification, transparency and intelligibility,” to adopt … Telfer … .

Neal Armstrong. Summary of Loyer (Succession) v. Canada (Attorney General), 2019 CF 1528 under s. 220(3.1).