In Donaldson v R, 2022 TCC 159, the former director of an invsolvent corporation argued that he had been duly diligent and was not liable for the unremitted source deductions of the corporation. He had met regularly with the CRA about the unremitted deductions, and he had signed eight cheques that were to have been delivered to pay the deductions.
The Tax Court rejected both arguments. The Tax Court cited Tozen v. The Queen, 2018 GTC 5 (TCC), and noted that even in times of serious financial difficulties, corrective measures do not absolve the taxpayer from taking preventative measures.
Meeting with the CRA was a corrective measure, not a preventative one. The taxpayer signed the cheques but never followed up to ensure they were sent (they were not), which the Court said was negligence, not due diligence (per Fengos v R, 2014 TCC 253).
Anthony Berlingieri “David Donaldson v. The King, 2022 DTC 1115 (Tax Court of Canada)—In Times of Financial Crisis, Tax Remittances Are Still Required” 2650-51 Tax Topics
