2 Year Limitation Period for Director’s Liability for Income Taxes

Subsection 227.1(4) of the Canadian Income Tax Act provides that no action for director liability for unpaid source deductions of a corporation may be commenced more than 2 years after a director ceased to be a director of the corporation. This means that CRA has 2 years to issue an income tax assessment for director income tax liability. Our experienced Ontario income tax lawyers often avoid director income tax liability using this 2 year limitation period.