http://decisions.fct-cf.gc.ca/fc-cf/decisions/en/item/98401/index.do 
Sailsman v. Canada (National Revenue) (October 31, 2014 – 2014 FC 1033) was an application for judicial review of the Minister’s refusal to permit the late filing of a non-resident tax return:
[1] This is an application for judicial review pursuant to section 18.1 of the Federal Courts Act, RSC 1985, c F-7, of a decision by the Minister of National Revenue, acting through the Canadian Revenue Agency (CRA), refusing to grant the Applicant an extension of time to file a non-resident tax return under the Income Tax Act, (RSC, 1985, c 1 (5th Supp.)) (the Act) so as to avoid the penalty associated with the late filing.
The applicant had been a resident of Canada, moved to Bermuda and was accorded non-resident status. However a difficult divorce and custody proceedings resulted in his moving back to Canada in late 2010. He failed to file his 2010 non-resident rental income return by June 30, 2011 and applied for an extension, which was denied and led to these proceedings:
B. Mr. Sailsman’s Divorce while in Bermuda
[7] On or around April 6, 2010, Mr Sailsman was served with an application for divorce by his wife, which he alleges took him completely by surprise. A battle for custody of their only son ensued. Finally, on or about September 22, 2010, the Supreme Court of Bermuda ordered the son back to Canada. Mr Sailsman and his son therefore moved back to Canada on September 25, 2010. The Applicant’s wife stayed in Bermuda, although she now lives in Jamaica, and has continued her legal proceedings for custody and equalization of assets. In 2013, these proceedings were still ongoing. Additionally, Mr Sailsman lost his job at IBM in March of 2012.
C. Mr. Sailsman’s Return to Canada
[8] In a letter dated December 31, 2010, Mr Sailsman attempted to advise the CRA that he had returned to Canada and was no longer a non-resident by submitting the form “Statement of Amounts Paid or Credited to Non-Residents of Canada” (the NR4 Form). He included a cheque for $180.00 and asked that his non-residency account be closed.
[9] In February 2011, Mr. Sailsman’s father called the CRA to inquire whether Mr. Sailsman’s NR4 Form had been received and asked that his non-residency account be closed once the NR4 Form processed. Mr. Sailsman’s father was informed that the NR4 Form had been received but not yet processed.
[10] On September 26, 2011, the CRA sent a letter to Mr Sailsman advising him that he had failed to file his 2010 Rental Income Return by the June 30, 2011 deadline as undertaken in his NR6 Form. The CRA therefore advised him that a 25% non-resident tax was payable on his Canadian rental income. This amount was assessed as being $7,920.00, plus applicable interest.
D. Mr. Sailsman’s Request that the late filing of his 2010 Rental Income Return be Accepted
[11] In a letter dated October 9, 2011, Mr Sailsman’s father advised the CRA that Mr Sailsman did not know that, although he had filed an NR4 Form, he was still required to file his 2010 Rental Income Return. He attached a completed Section 216(4) return form to this letter asking for it to be accepted with no penalty.
[12] On February 2, 2012, the CRA acknowledged receipt of the October 9, 2011 letter and informed Mr. Sailsman that the request contained therein would be referred to the Taxpayer Relief Committee. On March 1, 2012, Mr Sailsman was informed that this request would be treated by the Taxpayer Relief Committee as a request for an extension of time under subsection 220(3) of the Act which empowers the Minister of National Revenue to extend, at any time, the deadlines for making a return under the Act.
[13] By a letter dated March 12, 2012, the CRA advised Mr Sailsman that his request for an extension of time was denied.
Two requests for reconsideration were also denied. The second such request was the subject of the application for judicial review. The Minister’s reasons for denying the extension were set out by the court:
[17] The July 23, 2013 decision (the Impugned Decision) addressed each reason given by Mr Sailsman for not filing the 2010 Return on time. It can be summarized as follows:
a. The Canadian tax system being based on self-assessment, it is up to the tax payer to educate himself on his tax responsibilities, and misunderstanding of the filing requirements is not a valid reason for granting relief;
b. Although Mr Sailsman’s divorce proceedings and custody battles could be viewed as extraordinary circumstances, these events were resolved by the end of 2010, giving the Applicant time to file his 2010 Return by June 30, 2011;
c. The fact that Mr Sailsman and his son were returning to regular life in Canada as of November 1, 2010 should not have prevented him from filing by June 30, 2011;
d. It is not the responsibility of the taxpayer’s agent to file tax returns nor is it the responsibility of the CRA’s phone officers to provide the agent or the tax payer with information outside of the nature of the inquiry; and
e. Mr Sailsman filed an income tax return on May 17, 2011 for the 2010 taxation year, meaning that he should have been able to file the 2010 Rental Income Return by the applicable deadline a month a half later.
The court found that this decision was reasonable under the circumstances:
[39] Mr. Sailsman recognizes in his written submissions that it is the tax payers’ responsibility “to exercise reasonable care in conducting their tax matters”. He says in this regard that he “tried [his] upmost”. However, this was not the test he had to meet. Rather, he had to satisfy the CRA that there were special circumstances that prevented him from meeting the June 30, 2011 deadline. The CRA found that he had not established that he was facing such circumstances. Based on the record before me, I find that this was an acceptable and defensible outcome in respect of the facts and the law.
[40] Throughout his oral submissions before the Court, Mr. Sailsman kept referring to the fact that he would have expected a much better service on the part of the CRA, like the services financial institutions provide to their clients. These expectations were simply misplaced.
[41] Unlike financial institutions, the CRA is not a commercial undertaking offering its products and services in an open, competitive market. The CRA is a creature of statute whose mandate is to administer an income tax system that relies on self reporting by taxpayers. To that end, the Act gives the CRA broad powers in supervising the scheme of assessing and auditing taxpayers. In such context, the CRA and the taxpayers have opposing interests. Their relationship is therefore not one where the CRA should be responsible for protecting taxpayers from losses arising from their assessments (
Leighton v Canada (Attorney General), 2012 BCSC 961, at para 54). Rather, it is that of debtor-creditor, governed by statute and in a sense, adverse. As a result, absent a breach of the powers in the Act, the CRA has no duty towards a taxpayer other than to act in accordance with the Act for the purposes of the Act (Humby v Central Springs Ltd. 2013 FC 1136, at paras 118-122).
As a result the application was denied with costs, however the court limited the costs awarded against the applicant to $500, inclusive of all disbursements.