Date: 20071116
Docket: T-2298-05
Citation: 2007 FC 1198
Ottawa, Ontario, November 16,
2007
PRESENT: The Honourable Mr. Justice O'Reilly
BETWEEN:
PIOTR
ZYLKA
Applicant
and
ATTORNEY
GENERAL OF CANADA
Respondent
REASONS FOR JUDGMENT AND JUDGMENT
[1]
Mr. Piotr Zylka is a self-employed carpenter. In 2005, he asked the
Canada Revenue Agency (CRA) to waive interest and penalties he owed in respect
of previous taxation years because of financial hardship. The CRA concluded
that Mr. Zylka had not shown circumstances that would justify waiver of his tax
debt. Mr. Zylka made a second request for forgiveness and that, too, was turned
down.
[2]
Mr. Zylka argues that the CRA treated him unfairly in denying his
requests for relief and asks me to order the CRA to reconsider them. I can find
no basis for overturning the CRA’s decision and must, therefore, dismiss this
application for judicial review.
I.
Issue
Did the CRA
treat Mr. Zylka unfairly?
II. Analysis
[3]
I can overturn the CRA’s decision only if I conclude that it was unreasonable.
[4]
Under the Income Tax Act, R.S.C. 1985, c. 1 (5th
Supp.), s. 220(3.1) (relevant enactments are set out in the Annex) and the Excise
Tax Act, R.S.C. 1985, c. E-15, s. 281.1(1), (2), the Minster may, in his or
her discretion, waive penalties or interest payments; Information Circulars and
Memoranda outline the kinds of circumstances where the Minister may decide to exercise
that discretion. For example, under the Income Tax Act, interest and
penalties may be waived when the taxpayer has been prevented from making
payments due to natural disasters, civil disturbances, a postal strike, serious
illness, or emotional or mental distress (Information Circular 92-2). Similar
guidelines are provided for in relation to the Excise Tax Act (GST
Memorandum 500-3-2-1).
[5]
In Mr. Zylka’s first request to the CRA, he noted that the years 2000
and 2001 were very difficult years in the construction industry. He was forced
to rely on credit cards, loans and the generosity of his family and friends to
get by. In addition, he had to travel to Poland to visit an ailing family
member, who died in 2001. Further, his marriage broke down.
[6]
Mr. Zylka’s request was considered by a collections officer in Vancouver.
She recommended that his request for relief be denied on the basis that his
statement of income and expenses disclosed his ability to repay the amounts he
owed without undue hardship. The officer’s recommendation was confirmed by a
manager and Mr. Zylka was informed of the outcome.
[7]
Mr. Zylka’s second request noted that “crucial evidence” had been
ignored. Mr. Zylka implored the CRA to give him favourable consideration in
order to help him make a better life for his family.
[8]
This second request was considered by a different collections officer,
who reviewed Mr. Zylka’s entire file with fresh eyes. However, he too felt that
Mr. Zylka was able to repay his debt without undue hardship. The officer’s
recommendation was considered and confirmed by a “fairness committee” of CRA
managers.
[9]
Mr. Zylka originally claimed that the CRA had relied on a falsified
document when it concluded that he was in a position to repay his tax debt.
That allegation was withdrawn at the hearing when counsel for the respondent
produced an original of the document in question.
[10]
Mr. Zylka also alleged that some of the documents he submitted to the
CRA were lost, which resulted in the collections officers not having a complete
picture of his financial situation. Further, his tax liability was assessed on
the basis of assumptions about his income and expenses, rather than actual
evidence.
[11]
Clearly, Mr. Zylka was concerned about his actual assessments, as well
as the refusal to waive penalties and interest. He made representations to the
CRA about his tax liability and was able to persuade CRA officials to lower the
amounts he owed. He argues that there were other errors that went uncorrected.
However, the correctness of the underlying tax assessments is not the issue
before me. I can only consider whether the decision not to waive interest and
penalties was arrived at fairly.
[12]
Mr. Zylka gave an articulate and impassioned presentation of his
circumstances, for which I commend him. However, I have reviewed all of the
materials before me and have found nothing indicating that he was treated
unfairly by the CRA, or that the CRA exercised its discretion unreasonably in
denying his request for relief.
[13]
Accordingly, I must dismiss this application for judicial review.
JUDGMENT
THIS COURT’S JUDGMENT IS
that :
1.
The
application for judicial review is dismissed.
“James
W. O’Reilly”
Annex
|
Income
Tax Act, R.S.C. 1985, c. 1 (5th Supp.)
Waiver
of penalty or interest
220 (3.1) The Minister may at any time waive or
cancel all or any portion of any penalty or interest otherwise payable under
this Act by a taxpayer or partnership and, notwithstanding subsections 152(4)
to 152(5), such assessment of the interest and penalties payable by the
taxpayer or partnership shall be made as is necessary to take into account
the cancellation of the penalty or interest.
Excise Tax Act, R.S.C.
1985, c. E-15
Waiving
or cancelling interest
281.1 (1)
The Minister may, on or before the day that is 10 calendar years after the
end of a reporting period of a person, or on application by the person on or
before that day, waive or cancel interest payable by the person under section
280 on an amount that is required to be remitted or paid by the person under
this Part in respect of the reporting period.
Waiving
or cancelling penalties
(2) The Minister may, on or before the day
that is 10 calendar years after the end of a reporting period of a person, or
on application by the person on or before that day, waive or cancel all or
any portion of any
(a)
penalty that became payable by the person under section 280 before April 1,
2007, in respect of the reporting
period; and
(b)
penalty payable by the person under section 280.1 in respect of a return for
the reporting period.
|
Loi
de l’impôt sur le revenu, L.R.C. 1985, ch. 1 (5e suppl.)
Renonciation
aux pénalités et aux intérêts
220 (3.1) Le ministre peut, à tout
moment, renoncer à tout ou partie de quelque pénalité ou intérêt payable par
ailleurs par un contribuable ou une société de personnes en application de la
présente loi, ou l'annuler en tout ou en partie. Malgré les paragraphes
152(4) à (5), le ministre établit les cotisations voulues concernant les
intérêts et pénalités payables par le contribuable ou la société de personnes
pour tenir compte de pareille annulation.
Loi
sur la taxe d’accise,
L.R.C. 1985, ch. E-15
Renonciation ou
annulation — intérêts
281.1 (1) Le ministre peut, au
plus tard le jour qui suit de dix années civiles la fin d’une période de
déclaration d’une personne ou sur demande de la personne présentée au plus
tard ce jour-là, annuler les intérêts payables par la personne en application
de l’article 280 sur tout montant qu’elle est tenue de verser ou de payer en
vertu de la présente partie relativement à la période de déclaration, ou y
renoncer.
Renonciation ou
annulation — pénalité pour production tardive
(2) Le ministre peut, au plus tard le jour
qui suit de dix années civiles la fin d’une période de déclaration d’une
personne ou sur demande de la personne présentée au plus tard ce jour-là,
annuler tout ou partie des pénalités ci-après, ou y renoncer :
a) toute pénalité devenue
payable par la
personne en application de
l’article 280 avant le 1er avril 2007 relativement à la période de
déclaration;
b) toute pénalité payable par
la personne en application de l’article 280.1 relativement à une déclaration
pour la période de déclaration.
|
Email this Content