In 2005, I wrote a post about the 10-year limitation period for relief applications that was introduced by the 2004 budget, and I noted that the drafting of the limitation period was ambiguous. The Federal Court of Appeal just released a decision resolving that ambiguity in favour of the taxpayer given the purpose and context of the relief provisions: see Bozzer v. The Queen, 2011 FCA 186, rev’g 2010 FC 139.
I have some sympathy for the CRA concern that it will struggle to deal with relief applications where the circumstances giving rise to the application are lost in the mists of time. On the other hand, I found persuasive the Federal Court of Appeal’s example of how the 10-year limitation period, if interpreted in the manner suggested by CRA, could yield arbitrary and unfair results contrary to the purpose and spirit of the relief provisions (see “Scenario B” at ¶¶ 31ff of the decision). Query whether the CRA concern could be addressed by amending the Act to get rid of the arbitrary limitation period and putting the onus on the taxpayer to prove the facts that form the basis of the relief request.
