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Published: May 6, 2024

Still, the CRA bears the burden of proving that the taxpayer committed fraud or made such a misrepresentation. Yet its tax auditors will often reassess otherwise statute-barred taxation years without sufficient evidence that the taxpayer committed fraud or made a misrepresentation attributable to neglect, carelessness, or wilful default. Fuhr v The King provides yet another example of this practice. Faced with the CRA’s lack of evidence, the Tax Court of Canada allowed the taxpayers’ appeal outright — thereby cancelling tax reassessments that imposed over $2 million in additional taxable income and about $500,000 in gross-negligence penalties.


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