Alexander Millman

The appeal concerned gross negligence penalties assessed under subsection 163(2) of the Income Tax Act after a tax preparer filed unsigned T1 adjustment requests and loss carryback forms claiming massive fictitious business and capital losses for the appellant’s 2007 taxation year.

The Court held that the amended return materials and carryback requests were “returns” for subsection 163(2), that the appellant had participated in or acquiesced in their filing, and that the surrounding circumstances created obvious red flags requiring inquiry.

Applying the wilful blindness factors and the gross negligence framework, the Court found that the appellant either reviewed the forms and ignored their implausibility or deliberately failed to review them, and in either case met both the knowledge and gross negligence branches.

The Court further held that the Minister had proven the factual basis necessary to sustain the assessed penalty quantum even without trial evidence walking through each mathematical step, because the record contained the returns and all material inputs to the statutory formula.

The argument that no penalty could arise because the CRA rejected the amendments, or that the penalty should be limited to the immediate 2007 tax effect, was rejected in light of subsections 163(2) and 163(2.1).

The appellant appealed a reassessment for its 2006 taxation year concerning the calculation of arrears interest.

Following a transfer pricing audit and settlement, the appellant requested a carryback of a 2008 non-capital loss to offset the resulting increase in 2006 income.

The Minister calculated interest based on the date of the written request, while the appellant argued it should be based on the filing date of the loss year return.

The Tax Court of Canada dismissed the appeal, finding that the unambiguous wording of the Income Tax Act required the deemed payment date to be based on the date of the written request.

The applicant filed applications for new residential rental property rebates under the Excise Tax Act seven months after the two-year statutory deadline.

The Minister denied the applications as late and found no discretion to extend the time.

The applicant sought judicial review, arguing subsection 281(1) of the Act gave the Minister broad discretion to extend filing deadlines.

The Federal Court dismissed the application, holding that a rebate application is not a "return" under subsection 281(1) and the Minister lacks discretion to override the mandatory deadline in subsection 256.2(7).

This appeal addressed whether a provincial securities offence carrying a maximum sentence of five years less a day, together with a potential multimillion-dollar fine, engaged the right to a jury trial under s. 11(f) of the Charter.

The appellate record concerned conflicting lower-court rulings on whether the penalty scheme amounted to a more severe punishment requiring jury process.

The Court held that the accused was not entitled to a jury trial and adopted the majority reasoning of the provincial appellate court.

The statutory maximum imprisonment threshold was not transformed into a constitutionally jury-entitling punishment by adding the prospect of a financial penalty.

The appeal was dismissed.