Income Tax
Practice
Judicial review of decision denying request for waiver under Income Tax Act, R.S.C., 1985 (5th Supp.), c. 1, s. 204.1(4) of tax assessed under Act, Part X.I—Notice of assessment for 1996 taxation year, erroneously stating 1997 RRSP contribution limit—Error fault of Canada Revenue Agency (CRA)—Applicant making excess contributions—Receiving notice of proper contribution limit in 2004—Taxpayer with cumulative excess amount must complete T1-OVP form for each taxation year in which excess exists—Penalties, interest can accumulate if T1-OVP not filed on time, tax not paid—Under s. 204.1(4), Minister may waive tax if overcontribution occurred because of reasonable error and if reasonable steps taken to eliminate excess—Error reasonable given earlier decision by which CRA offered applicant opportunity to withdraw overcontributions on tax-free basis—In view of CRA’s failure to suggest proper time for withdrawal or indicate any urgency, and error as to amount, not reasonable for CRA to conclude applicant not taking all reasonable steps to remove over-contribution because she did not make withdrawal for 11 months—Also breaches of duty of procedural fairness—Decision unreasonable, process behind it unfair—Application allowed.
Kerr v. Canada (Attorney General) (T-1528-07, 2008 FC 1073, judgment dated September 23, 2008, 20 pp.)