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Federal Tax - Reassessments. Freedman v. Canada
In Freedman v. Canada (Fed CA, 2023) the Federal Court of Appeal set our briefly the test for extending the time to make an income tax re-assessment:[4] We are all of the view that the Judge correctly identified and applied the two-step approach to determine whether the appellants could be reassessed beyond the normal reassessment period pursuant to subparagraph 152(4)(a)(i) of the Act (Vine v. Canada, 2015 FCA 125, [2015] 4 F.C.R. 698). In a detailed and thorough analysis, the Judge considered the evidence before him and found that the proceeds of dispositions of shares had been misrepresented on the appellants’ respective 2006 income tax returns, and that these misrepresentations were attributable to carelessness and neglect within the meaning of subparagraph 152(4)(a)(i) of the Act (Judge’s Reasons at para 96). We all agree with his conclusions for essentially the same reasons. . Peach v. Canada
In Peach v. Canada (Fed CA, 2022) the Federal Court of Appeal considered CRA's extension of re-assessment beyond the normal three years:[11] First, the Tax Court did not err in finding that the Minister was entitled to reassess the appellant beyond the normal reassessment period. To reassess a taxpayer after the normal three-year reassessment period under subparagraph 152(4)(a)(i) of the Act, the Minister must establish that the taxpayer made a "“misrepresentation that is attributable to neglect, carelessness or wilful default or has committed any fraud in filing the return or in supplying any information under this Act.”" The Tax Court correctly identified the governing legal test and noted that the onus was on the Minister to prove that the appellant’s conduct satisfied the statutory requirement (Reasons at paras. 71-73).
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