A Federal Court decision from earlier this year considers whether interest relief should be available to a taxpayer whose objection is held in abeyance pending the outcome of the appeal.
The CRA, when considering an objection of a taxpayer whose case is very similar to one that is before the courts, will often hold the objection in abeyance pending the outcome of the case. If the case takes too long to work its way through the courts, the appellant in the case might be entitled to interest relief in respect of the delays (see Cole v. Canada (Attorney General), 2005 FC 1445). What about the taxpayer whose objection has been held in abeyance?
The CRA for some reason seemed to believe that, while the taxpayer before the courts might be entitled to relief for delay in the courts, the taxpayer with the objection should not. The Court in Telfer v. Canada (Canada Revenue Agency), 2008 FC 218, disagreed:
It seems to me that in the present case even if the applicant was warned by the Minister of the continuance of interest during the delay caused by the court proceedings in the Brown case, it is unfair to impose all of the interest upon the applicant who was not before the Tax Court. Therefore, I believe it would be only fair that the applicant should only have to pay one-half of the accrued interest during the waiting period caused by the Brown case.
