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The Decision



The taxpayer argued before the court that the CRA was partially to blame for her late filing since the CRA “misinformed her about whether there would be a penalty.” She testified that she called the CRA and asked them about the consequences of late-filing her T1 personal tax return. She relied on the advice given over the phone that she would not be assessed a penalty if she filed her tax return late if she did not owe money.

But the judge wasn’t persuaded by her argument, saying that when the taxpayer called the CRA, rather than asking about the T1 return, she could have asked about the treatment of a late-filed T1135. She then would have been advised that a late filing of the T1135 would incur a penalty whether or not you owed money on your T1 for the tax year.

The judge concluded that “it was reasonable for the CRA not to grant a waiver of the penalty for the late filing of the same form two years in a row,” noting that the “teaching moment” the year before “should have illuminated to her the importance of filling the T1135 on time.”

So, as we approach the start of this year’s tax season, keep in mind the importance of filing the T1135 form on time. And, if you run into any newly arrived royals in 2020, you may want to tip them off about their potential tax obligations should they indeed become residents of Canada.

Jamie.Golombek@cibc.com

Jamie Golombek, CPA, CA, CFP, CLU, TEP is the Managing Director, Tax & Estate Planning with CIBC Financial Planning & Advice Group in Toronto.