Précis: The appellant, who was employed at Chrysler, claimed a business loss of $447,148.31 in 2009. Although the loss was initially allowed, she was subsequently reassessed to deny the loss and a gross negligence penalty of $51,569.49 was applied. The Tax Court dismissed her appeal of the penalty and she appealed to the Federal Court of Appeal. The primary basis of the appeal was that the Tax Court judge erred in imposing too low a standard for a finding of “wilful blindness”. Counsel argued that the test, established in Supreme Court criminal jurisprudence, involved finding an intention to “cheat”. The Federal Court of Appeal rejected this argument holding that imposing a criminal law standard was not appropriate for the imposition of gross negligence penalties under the Income Tax Act (the “Act”).
Wynter v. R. – FCA: Claiming false business loss amounted to willful blindness – penalties upheldPlus >