Individual taxpayer P practiced as astrologer through taxpayer corporation. After audit, Canada Revenue Agency (CRA) determined that taxpayers owed tax arrears, interest and gross negligence penalties under Income Tax Act and Excise Tax Act. CRA decided not to waive penalties and interest. Taxpayers brought applications for judicial review of four decisions. Applications dismissed. There were no circumstances to waive interest or penalties. Delay in audit did not warrant waiver of interest or penalties. Taxpayer knew he could have paid penalties while pursuing appeals and CRA was not responsible for delay. Allegation of CRA error and challenge to net worth assessment were not before decision-makers. Taxpayers did not suggest that P’s illness or mental distress started before failures to comply, so that condition did not warrant waiver of interest or penalties. It was reasonable to determine that taxpayers did not demonstrate financial hardship as P had investment property and money and had been purchasing expensive non-essentials. Since corporation had ceased operation, there was no threat to jobs or community so there was no exceptional situation warranting cancellation of penalties.
Pathak v. Canada (National Revenue) (2019), 2019 CarswellNat 564, 2019 FC 252, Russel W. Zinn J. (F.C.).