Froehling – Federal Court finds that the taxpayer failed to demonstrate why his RRSP over-contribution was attributable to reasonable error

The taxpayer over-contributed to his RRSPs for the 2018 taxation year in December 2018 and, upon realizing his error in March of 2019, filed a return reporting the Part X.1 tax on his over-contribution (which was assessed largely as filed) - and then applied for waiver of the tax pursuant to s. 204.1(4).

Aylen J noted that in Connolly “the applicant had provided little detail as to why he made the mistake that resulted in his over-contribution and did not appear to have made any inquiries, whether with his accountant, his bank or his employer, to confirm his RRSP contribution room … [so that] the Federal Court of Appeal concluded that his error likely could not be said to have been a reasonable one,” and found that she was faced with a similar situation here, stating:

The onus was on the Applicant to ensure that he did not over-contribute to his RRSP and if there was any lack of clarity or understanding as [to] the contribution room available to him, the Applicant was expected to seek advice … .

She found that CRA’s decision not to waive the tax was not unreasonable.

Neal Armstrong. Summary of Froehling v. Canada (Attorney General), 2021 FC 1439 under s. 204.1(4).