Thompson – Tax Court of Canada finds that a failure to keep asking questions constituted carelessness

In Aridi, Hogan J found that there was no "neglect" in the taxpayer’s reliance on incorrect advice from his accountant (which he had probed before accepting), so that the reassessment at issue was statute-barred.

In Thompson, Hogan J declined to extend Aridi to the situation where in Year 1 the taxpayer had inquired of his accountant, Why was his income from his newly-incorporated business lower than his cash draws, and was informed that there was an income deferral because shareholder advances had not yet been required to be converted into taxable bonuses - but had failed to inquire in Years 2 and 3, Why did his reported income continue to be low. If he had continued to ask questions, errors in his Years 2 and 3 returns would have emerged, and this “absence of oversight constitute[d] carelessness” which opened up those returns to reassessment beyond the normal reassessment period.

Neal Armstrong. Summary of Thompson v. The Queen, 2017 TCC 115 under s. 152(4)(a)(i).