Vine Estate – Federal Court of Appeal leaves open the question whether neglect for statute-barring purposes must be that of the taxpayer itself rather than its accountants

The general sense of a complex reporting and audit history is suggested by indicating that an estate filed what it later alleged was an amended return correcting a previous failure to report recapture of depreciation - but which hid this element of that "amending" return from CRA’s attention (so that it did not reassess for the recapture within the normal reassessment period).

Not a winner case. Webb JA found that even if CRA had been able to discover the correction in the "amended" return, this would not have had the effect of clearing the negligent misrepresentation in the original return – so that the estate could be reassessed for the missing recapture beyond the normal reassessment period. This might be regarded as the flip side of a mooted proposition that if a return is filed without neglect, there is no obligation to file an amended return for a subsequently discovered error.

Webb JA indicated that as the estate should have noticed that the property to which the recapture related was not listed in the original return, it was not necessary for him to decide whether he agreed with Campbell J below (who, in turn, followed Aridi) that neglect etc. (for purposes of opening up statute-barred years) had to be that of the taxpayer (the estate) rather than only of its accountants.

Neal Armstrong. Summaries of Vine Estate v. The Queen, 2015 FCA 125 under s. 152(4)(a)(i) and General Concepts – Onus.