Roland P. Schwalm

The appellant appealed an assessment for the 2009 taxation year imposing a gross negligence penalty under subsection 163(2) of the Income Tax Act.

The appellant had used a tax preparer who reported a fictitious net business loss of $333,418 to generate a substantial refund.

The Tax Court of Canada dismissed the appeal, finding that the appellant was wilfully blind and grossly negligent in signing the return without reviewing it, given the blatant red flags including the magnitude of the purported loss and the unusually large refund.

The appellant appealed a reassessment imposing gross negligence penalties under subsection 163(2) of the Income Tax Act for claiming fictitious business losses in his 2009 taxation year.

The appellant had used the services of Fiscal Arbitrators to claim nearly $400,000 in losses despite never operating a business.

The Tax Court of Canada dismissed the appeal, finding that the appellant was wilfully blind to the blatant false statements in his return and failed to make proper inquiries despite his education and experience.

The appellant appealed a gross negligence penalty imposed under subsection 163(2) of the Income Tax Act for claiming $320,000 in fictitious business losses in his 2009 income tax return.

The losses were claimed through the Fiscal Arbitrator tax preparation scheme.

Applying the Torres framework, the Tax Court of Canada found the appellant was wilfully blind to the blatant false statements and the magnitude of the resulting tax refund.

The appeal was dismissed with costs.