Reviewing your tax return

The court upheld gross negligence penalties in Fransen v R, 2023 TCC 107, a Fiscal Arbitrators case, because the taxpayer had been wilfully blind (the test for which is discussed at paras 9ff) and because he had not bothered to review his tax return before filing it.

[82] The evidence demonstrates Mr. Fransen signed the Return without reviewing it or its contents and merely followed the placement of the sticky notes in placing his signature on the Return. How then was he able to sign on the back page ““I certify that the information given on this form is correct and complete.””? The answer is he could not provide such certification. He took the same approach when signing the Request without reviewing it. There was no evidence he was incapable of understanding the obligation not to make a false statement in the Return.

[83] Failure to review a return at all is suffice [sic] to find that any false statements in the Return are made in circumstances amounting to gross negligence, hence justify the penalty.

[84] A number of cases have found gross negligence and upheld penalties in instances where taxpayers had blindly relied on the advice of their tax preparer without reading or reviewing their returns and without making any effort whatsoever to verify the accuracy of the returns.

See also my posts here and here on similar cases.

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