Hogg v. The Queen (November 22, 2017 – 2017 TCC 231, Paris J.).
Précis: This is another in a long line of cases where the taxpayer unsuccessfully claimed fictitious business losses and was assessed gross negligence penalties. Mr. Hogg’s appeal to the Tax Court was dismissed. He know what business losses were and he did not have any. There was no order for costs.
Decision: Mr. Hogg’s story is familiar:
 Mr. Hogg claimed a fictitious business loss of $316,225 in an amendment to his tax return for his 2008 taxation year. He also filed a request to carryback the unused non-capital losses resulting from the alleged business loss to his 2005, 2006 and 2007 taxation years.
 The Minister of National Revenue (the “Minister”) did not accept Mr. Hogg’s adjustment request and loss carryback request, and in a reassessment of Mr. Hogg’s 2008 taxation year, imposed a penalty of $44,733.51 under subsection 163(2) of the Income Tax Act (the “Act”) in respect of the false claims.
 Mr. Hogg admits that he did not incur the business loss that was claimed in the amendment request and that he did not have any non-capital losses available to be carried back to his earlier taxation years. He is only appealing the imposition of the penalty.
 Mr. Hogg testified that he was the victim of a scam carried on by certain individuals, including one who had allegedly been a previous employee of the Canada Revenue Agency (the “CRA”) (Muntaz Rasool). Mr. Hogg said he was aware that some of his co-workers who had used the services of those individuals had received large tax refunds, and therefore believed that the activities of Rasool and his associates were legitimate. He said that once he learned that the losses claimed in the amendment request were false, he cooperated with the CRA and was told that the penalty that would be imposed would only be “moderate”.
The Court was not accepting of his explanations:
 I do not accept that Mr. Hogg would have required knowledge of income tax beyond what he already possessed in order to appreciate that the forms in issue contained false statements. The T-1 Adjustment Request form shows quite clearly a change to business income from 0 to -$316,225 and the Request for Loss Carryback form shows a loss of $316,225 on the line for “Business Income”. By his own admission, he knew what a business loss was and that he did not have a business loss of $316,225 in 2008. Had he taken even a moment to read those forms, I am convinced that it would have been readily apparent to him that they contained false statements.
 I find that Mr. Hogg abdicated his responsibility for the correctness of the information contained in the forms, and that his conduct in filing those forms amounted to gross negligence.
 Mr. Hogg’s cooperation with the CRA investigation after the false statements were discovered is not relevant. The relevant point in time for the determination of whether his conduct was grossly negligent is the time he signed and filed the forms containing the false statements. I am also unable to take into account his family circumstances or the withholding of tax refunds relating to subsequent tax years. This Court has no equitable jurisdiction and I cannot reduce the amount of the penalty once I have determined that it has been imposed in accordance with the law.
Mr. Hogg at least had the consolation that no costs were awarded against him.