http://decision.tcc-cci.gc.ca/tcc-cci/decisions/en/item/180992/index.do
Carpenter v. The Queen (September 16, 2016 – 2016 TCC 201, Smith J.).
Précis: The taxpayer failed to file returns for 1999 to 2002. In 2004 she was assessed for each of those years and did not file a notice of objection. In 2013 she filed returns for 1999-2012. The 2003-2012 returns were assessed as filed but the 1999-2002 returns were returned to her and not further assessed. She filed a notice of objection in 2013 to the years 1999 to 2012. On March 3, 2015 CRA confirmed its position. On May 9, 2016 the taxpayer filed an application to extend the time to file a Notice of Appeal but it was not perfected (by inclusion of a draft Notice of Appeal) until June 7, 2016. The Court found that the application was technically out of time and also found that under the circumstances it would not be appropriate to exercise its discretion even if the application were not out of time. There was no order as to costs.
Decision: The taxpayer’s situation was convoluted:
[1] This is an application for an Order extending the time within which a Notice of Appeal may be filed in respect of the 1999 to 2012 taxations years.
[2] The Minister of National Revenue (the “Minister”) initially assessed the applicant for the 1999, 2000, 2001 and 2002 taxation years pursuant to subsection 152(7) of the Income Tax Act, L.R.C. 1985, 5th Supp., (the “Act”) by Notices of Assessment dated March 8, 2004.
[3] The applicant took no steps to deal with this matter until March 26, 2013 when she filed her income tax returns for the 1999 to 2012 taxation years.
[4] The Minister assessed the applicant for the 2003 to 2012 taxation years as filed (including interest and late filing penalties) by Notice of Assessment dated June 20, 2013 and on July 9, 2013 informed the applicant that her request for an assessment of the 1999 to 2002 taxation years could not be considered as more than ten years had elapsed. These returns were sent back to her.
[5] On September 10, 2013, the applicant served a Notice of Objection on the respondent with respect to the 1999 to 2012 taxation years.
[6] By letter dated March 3, 2015, the Minister confirmed its position, maintaining that a Notice of Objection with respect to the 1999‑2002 taxation years had not been filed on a timely basis and that a request for an extension of time had also not been filed on a timely basis. The Minister then confirmed the assessments with respect to the 2003‑2012 taxation years, indicating in particular that the Notices of Assessment for the 2004, 2005 and 2010 taxation years could not be appealed as they resulted in nil assessments.
[7] On May 9, 2016, the applicant filed an application for an extension of time to file a Notice of Appeal of the confirmation of March 3, 2015.
During the course of the hearing it became apparent that the taxpayer’s difficulties were related to a large severance payment she had received and not reported:
[12] The applicant explained that she had worked in the banking industry for about 27 years and that she had filed income tax returns every year until 1998. She maintained that she did not receive any assessment for 1999, 2000 and 2001 and that the Notice of Assessment for 2002 (dated March 8, 2004) indicated a balance forward of approximately $69,000 which she could not explain and which she wanted to correct.
[13] During cross‑examination, it became apparent that the applicant’s employment had been terminated in 1999 and that she had received a lump sum severance payment from her former employer, such that her annual income increased to about $151,000. It is not clear in which year this was received.
In essence the Court simply did not find the taxpayer’s facts sympathetic:
[24] My first observation is that the application is technically deficient in that the Notice of Appeal is dated June 7, 2016, that is “more than one year after the expiration of the time limited by section 169 for appealing”. Subsection 167(3) requires that the Notice of Appeal be filed with the application. Although, the application itself, being the letter of May 9, 2016, was filed within the twelve month period, it was not actually perfected until June 7, 2016. As such, the applicant has not met the requirement set out in paragraph 167(5)(a) of the Act.
[25] Moreover, the application must be considered in light of the context that the applicant failed to file a tax return for the 1999 to 2002 taxation years, despite the fact that she had received a lump sum severance payment. She also ignored the Notice(s) of Assessment of March 8, 2004 and waited until March 26, 2013 before filing her income tax returns for the 1999 to 2012 taxation years. Counsel for the respondent has argued that this type of conduct should not be condoned. I would agree.
[26] I have already addressed the fact that the applicant failed to file a Notice of Objection on a timely basis and I have addressed her argument with respect to the Minister’s purported obligation to reconsider her tax returns for the 1999 to 2002 taxation years on the basis of subsection 152(4.2) of the Act.
[27] When I consider all the evidence, I am unable to conclude that the applicant has satisfied the four‑prong test set out in subsection 167(5)(b) of the Act. In particular, I am not satisfied that “it would be just and equitable to grant the application” nor that “there are reasonable grounds for the appeal”.
[28] For these reasons, I am unable to extend the time for instituting an appeal against the assessments for the 1999 to 2012 taxation years.
As a consequence the application was dismissed. There was no order as to costs.