http://decision.tcc-cci.gc.ca/site/tcc-cci/decisions/en/item/66641/index.do 
Krenbrink Estate v. The Queen[1] (January 27, 2014) was a case turning solely on whether the taxation year in question was statute-barred:
[1] Raymond Krenbrink is deceased. At the time of his death he was the annuitant under a Registered Retirement Income Fund with a fair market value of $228,164. Mr. Krenbrink’s daughter, Diana Brown, was the executor of his estate. When Ms. Brown filed a date of death tax return for Mr. Krenbrink, she did not include the fair market value of his RRIF in his income as required under subsection 146.3(6) of the Income Tax Act (the “Act”). The Minister of National Revenue assessed Mr. Krenbrink’s date of death tax return as filed. The Minister subsequently reassessed Mr. Krenbrink to include the RRIF income. The reassessment was made beyond the normal reassessment period.
[2] The Appellant does not dispute that the fair market value of the RRIF should have been included in Mr. Krenbrink’s income. However, the Appellant states that the Minister is now statute barred from doing so. The Respondent submits that the Appellant made a misrepresentation attributable to carelessness or neglect in not reporting the fair market value of the RRIF and thus that the period is not statute barred.
The taxpayer framed her arguments in an unusually complex manner:
[11] The Appellant raised numerous issues:
(a) Did the Appellant make a misrepresentation?
(b) If the Appellant made a misrepresentation, does subsection 152(9) permit the Respondent to argue that the misrepresentation was attributable to either carelessness or neglect or is the Respondent limited to arguing that the misrepresentation was attributable to carelessness?
(c) If subsection 152(9) permits the Respondent to argue that the misrepresentation was attributable to carelessness or neglect, is the Respondent prevented from doing so because the Respondent failed to include subsection 152(9) in her list of statutory provisions relied upon in the Reply?
(d) If subsection 152(9) permits the Respondent to argue that the misrepresentation was attributable to carelessness or neglect and the Respondent is not prevented from doing so because the Respondent failed to include subsection 152(9) in her list of statutory provisions relied upon in the Reply:
(i) what is the minimum standard of care that the Minister must prove the Appellant failed to meet;
(ii) is there a lower standard of care required of executors; and
(iii) did the Appellant meet the applicable standard of care?
The court first concluded that a misrepresentation had been made by the appellant:
[12] The Appellant did not admit that a misrepresentation was made. However, the Appellant agrees that the fair market value of the RRIF should have been included in income and did not provide any evidence or argument that would suggest a misrepresentation was not made. I conclude that the failure to include $228,164.20 was a misrepresentation.
The court then turned to the appellant’s arguments based on subsection 152(9):
[15] The Minister reassessed the Appellant on the basis that the Appellant had made a misrepresentation attributable to carelessness. The Appellant submits that the Respondent is prohibited from raising any new basis of assessment. The Appellant submits that, in now arguing that the misrepresentation was attributable to carelessness or neglect, the Respondent is raising a new basis of assessment.
[16] Subsection 152(9) sets out the circumstances in which the Minister can raise an alternative argument in support of an assessment. Subsection 152(9) states:
Alternative basis for assessment. The Minister may advance an alternative argument in support of an assessment at any time after the normal reassessment period unless, on an appeal under this Act
(a) there is relevant evidence that the taxpayer is no longer able to adduce without the leave of the court; and
(b) it is not appropriate in the circumstances for the court to order that the evidence be adduced.
[17] The Appellant submits that subsection 152(9) permits the Minister to raise a new argument in support of an assessment but not a new basis for assessment.
The court rejected this line of argument:
[20] The Respondent submits that she has not raised a new argument. It is not necessary for me to decide whether the Respondent has raised a new argument because, even if the Respondent had raised a new argument, the three conditions set out in Walsh have been met.
(a) The Minister reassessed the Appellant in respect of a deemed income inclusion from an RRIF that occurred upon death. That is the same “transaction” that the Minister continues to pursue at appeal.
(b) The Appellant provided no indication of any prejudice of the type described in subsection 152(9). The Appellant had notice of the Respondent’s position from the time the Reply was filed. The Reply clearly stated that the Respondent was taking the position that the Appellant’s misrepresentation was due to carelessness or neglect. I am accordingly unaware of any evidence that the Appellant would not have been able to introduce without leave from the Court.
(c) Finally, the amount of tax assessed has not changed as a result of the Minister’s position that the misrepresentation was attributable to carelessness or neglect.
The court then turned to the appellant’s contention that the respondent’s failure to specifically plead subsection 159(2) should preclude the respondent from raising the carelessness/neglect argument:
[26] In addition to the above, I am mindful of the fact that the Appellant is, to an extent, arguing out of both sides of its mouth. The Appellant argues that the Respondent cannot take the position that the misrepresentation was attributable to neglect because that position would amount to a new basis of assessment. Yet that issue was not raised by the Appellant in its pleadings. Admittedly the Appellant was not aware of the issue until it received the Reply. However, once the Appellant read the Reply and realized that the Respondent intended to rely on neglect to support the reassessment, the Appellant should, in fairness to the Respondent, have filed an Amended Notice of Appeal raising the issue. The Appellant is, in essence, arguing that it is unfair that the Respondent, who was unaware of the issue the Appellant was going to be raising, did not plead subsection 152(9) despite the fact that subsection 152(9) would not even have been the Respondent’s primary defence of that unanticipated issue but rather her alternative defence of the unanticipated issue.
[27] Based on all of the above, to the extent that it is even necessary for the Respondent to rely on subsection 152(9), I am not prepared to prevent her from doing so.
Similarly, the court rejected the argument that an executor somehow had a lower standard of care than that imposed on other taxpayers:
[29] I do not agree with the Appellant’s position. In Wohlleben, the Supreme Court of Canada described the standard of care that a trustee administering a trust owes to the beneficiaries of the trust, not the standard of care that an executor filing tax returns owes to the Minister. I see no reason why the standard of care that an executor owes to the Minister would be any different than the standard of care that other taxpayers owe. The Appellant did not direct me to any tax cases that would support the application of the Wohlleben standard to tax cases.
Finally the court concluded that the appellant’s conduct evidenced negligence sufficient to open up the taxation year in question:
[35] I note that, in reaching my conclusion that Ms. Brown was negligent, I have given some minor weight to what could be described as Ms. Brown’s negative attitude about getting the return prepared as evidenced by her anger with the estate’s lawyers for making her get the return prepared, the method by which she chose the tax preparer and her decision to send the tax return back to the lawyers instead of to the CRA. While none of these actions is individually troubling, when viewed collectively and in combination with her decision not to review any tax slips, they are indicative of an overall desire to put as little effort into the preparation of the tax return as possible.
Carelessness
[36] The Appellant asserts that there is a difference between neglect and carelessness and that the standard of care necessary for carelessness is higher than that of neglect. Given my conclusions above, it is unnecessary for me to consider this issue.
Summary
[37] Based on all of the foregoing, the appeal is dismissed with costs.
[1]2014 TCC 22.