In Goldhar v R, 2023 TCC 30, the CRA alleged that certain transfers had conferred a benefit on the appellant in a total amount of about $5.5 million. The appellant argued that the transfers were inter-corporate loans that had not conferred any benefits. The CRA reassessed the benefits even though the years in issue were statute-barred. The Court allowed the appeal. The Crown did not provide sufficient evidence to show that benefits had been conferred in respect of about $4.4 million of the $5.5 million reassessed. Regarding the remaining $1.1 million amount, the Court found that the Crown had not proven that the taxpayer had made a misrepresentation “attributable to neglect, carelessness or wilful default.” The appellant had reasonably relied on his professional advisers. He had no accounting or tax background, he had worked closely with his advisers on his tax affairs, he had changed advisers when he believed they had made mistakes, and he reviewed his returns with his accountants before his returns were filed.
The Court also allowed the appellant’s appeal in respect of gross negligence penalties and penalties for failing to file accurate foreign reporting forms. The Crown had not proven gross negligence, and the appellant had exercised due diligence in respect of the reporting forms.
