Words and Phrases - "wilful blindness"

a
87
b
44
c
77
d
51
e
38
f
31
g
18
h
14
i
74
j
2
k
2
l
32
m
56
n
25
o
38
p
80
q
3
r
76
s
90
t
46
u
16
v
9
w
23
y
2

Wynter v. Canada, 2017 FCA 195

Summary Under
Tax Topics - Income Tax Act - Section 163 - Subsection 163(2)
wilful blindness is deliberate ignorance and does not require intention to cheat

The taxpayer, who after starting to use DSC Lifestyle Services in preparing her returns, claimed very large business losses despite not having operated a business, was found by the judge below to have shown wilful blindness so as to justify the imposition of the s. 163(2) penalty.

Rennie JA stated (at para. 13):

A taxpayer is wilfully blind in circumstances where the taxpayer becomes aware of the need for inquiry but declines to make the inquiry because the taxpayer does not want to know, or studiously avoids, the truth.

In then rejecting the taxpayer’s appeal and, in particular, rejecting her submission (at para. 14) that “wilful blindness requires evidence sufficient to demonstrate that the taxpayer actually knew the return was false and that the taxpayer ‘intended to cheat the administration of justice’,” Rennie JA stated (at para 17):

While evidence, for example, of an actual intent to make a false statement would suffice to meet the “knowingly” requirement of subsection 163(2), requiring an intention to cheat to establish wilful blindness is inconsistent with the well-established jurisprudence that wilful blindness pivots on a finding that the taxpayer deliberately chose not to make inquiries in order to avoid verifying that which might be such an inconvenient truth. The essential factual element is a finding of deliberate ignorance, as it “connotes ‘an actual process of suppressing a suspicion’”: Briscoe [2010 SCC 13] at para. 24. … The gravamen of the offence under subsection 163(2) is making of a false statement, knowing (actually or constructively, i.e., through wilful blindness) that it is false.

He added (at para. 21):

[W]here gross negligence is alleged, I would expect consideration of whether the conduct of the taxpayer at issue is such a marked departure from what would be expected that it constitutes a high degree of negligence sufficient to be characterized as a marked departure from the standards, practices, and due diligence expected of a responsible taxpayer.

Words and Phrases
wilful blindness