Robitaille – Tax Court of Canada finds that a fully-unintended TFSA overcontribution generated over-contribution tax

The taxpayer, as a result of tapping the wrong icon on an ATM machine, inadvertently deposited $40,000 to his TFSA rather than his chequing account. He did not discover this until the overcontribution was drawn to his attention by a CRA agent almost a year later, at which point he immediately withdrew the $40,000. He had in a previous year made a $5,000 over-contribution, so that CRA did not apply its policy of automatic relief for first-time over-contributors.

In a decision that came out several months ago, Spiro J found that the Minister’s assessment of tax under s. 207.07(1)(b) was correct, but then stated, obiter:

Should the Minister decide to exercise her discretion under subsection 207.06(1) of the Act to cancel the Appellant’s liability in respect of the inadvertent deposit of $40,000 to his TFSA on the night of July 21, 2016, such cancellation would find ample support on the extraordinary facts of this case

Neal Armstrong. Summary of Robitaille v. The Queen, 2019 TCC 200 (Informal Procedure) under s. 207.02.