Repeated Failure-To-File Penalty: Scope Narrowed

Michelle Moriartey

A repeat late filer may be assessed a penalty of up to 50¬†percent of the income tax payable that was unpaid when the return was due. However, in Hughes v. The Queen (2017 TCC 95; informal procedure), the court held that the penalty does not apply when the taxpayer files the return within the time period set out in the demand to file. This is a marked departure from the CRA's administrative practice to date. Hughes could be the basis for the filing of a notice of objection with respect to recent applications of this penalty to clients, particularly since the onus is on the minister to prove that the penalty has…

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