Tiffany Santos

The appellant appealed the assessment of penalties under subsection 162(7) of the Income Tax Act for failing to file T1135 Foreign Income Verification Statements on time for the 2019 and 2020 tax years.

The Tax Court of Canada held that while a due diligence defence is available for subsection 162(7) penalties, the appellant failed to establish it.

Having previously made a voluntary disclosure for the same issue, a reasonable person in her circumstances would have taken greater care.

The appeals were dismissed.

The appellant, a commission salesperson at Holt Renfrew, sought to deduct luxury clothing and home office expenses for the 2016, 2017, and 2018 taxation years.

The employer refused to issue a Form T2200, stating she was not required to incur these expenses as a condition of employment.

The Tax Court of Canada dismissed the appeals, finding no express or implied contractual requirement for the appellant to incur the disputed expenses, and further noting the lack of documentary evidence to substantiate the amounts claimed.