The taxpayer, in a previous application (2019 FC 51), succeeded in having the Court order the CRA to reconsider its decision because it did not adequately address how the demand for returns from the individual would have uncovered the corporation’s failure to file. The CRA duly reconsidered the corporation’s VD submission and rejected it. The Court, in 2021 FC 2018, dismissed the taxpayer’s application because it had not met the onus on it to prove that the CRA’s decision was unreasonable. The Court, at ¶4, wrote:
Having reviewed the Minister’s decision and 405 Canada’s arguments, I conclude the decision was reasonable. The decision sets out the enforcement steps taken against Mr. Harris and the information those enforcement steps revealed, including information in Mr. Harris’s returns connected to 405 Canada. This was a reasonable basis to conclude the enforcement steps were likely to have revealed the disclosed information. Unlike the prior decision that was quashed, the Minister’s decision adequately explains their basis for this conclusion. I agree with 405 Canada that the decision letter does refer to less relevant matters, including enforcement steps taken after the VDP application and Mr. Harris’s general history of non-compliance. However, these references do not undermine the overall reasonableness of the decision.