In Rezler v. The Queen, 2009 TCC 609, the taxpayer made excess contributions to her RRSP. On appeal, the Tax Court judge responded as follows:
[6] The issue before me is whether the Part X.I tax on excess contributions, the 1% per month, plus the late filing penalty and interest have been correctly assessed.
[7] The Appellant has one argument, that is that she is being taken advantage of and treated unfairly, because the Government did not make it clear until years after the tax arose, that there was a 1% per month tax on excess contributions, assessing in 2008 for the 2003 to 2006 taxation years.
[8] While I can sympathize with the taxpayer, and indeed agree that it is difficult for a taxpayer to know and appreciate all aspects of our very complicated tax legislation, it does not justify non-compliance with those laws. In Canada, we have a self-assessment system. This does put an onus on the taxpayer to keep records, complete forms, and submit returns and taxes on a timely basis. I acknowledge the Part X.I tax on excess contributions may not be a well-known tax at every taxpayer’s fingertips. However, it is the law. There is no requirement on the Government to spell it out in detail for the taxpayer. The Government does provide a summary of the taxpayer’s RRSP status, and Mrs. Rezler would have known on a timely basis that her deductions for her RRSP contributions were disallowed. She sought professional advice to make the contributions, but she did not seek advice as to why it was not allowed. A review of her annual assessments should have alerted her to a problem with these payments. Her agent, her husband, Mr. Bromberg, suggested the Government should have spelled out for Mrs. Rezler that she could be facing this 1% per month penalty. That, however, is not the Government’s responsibility.
Translation: hire an accountant.
