The CRA officer, performing a first-level review, denied the taxpayer’s request for relief, saying that the owner’s personal financial situation was not relevant to the corporation’s financial situation “as they are separate entities.” In terms of the owner’s parents’ medical situation, the CRA officer was unable to conclude that there were circumstances that prevented the corporation from filing its return on time.
This second-level review also denied the corporation’s request for relief, stating that “under Canada’s self-assessment tax system, corporations are responsible for ensuring their tax returns are … filed on time.… Although you may use the services of a professional, the relationship between a taxpayer and a tax preparer is one of choice, and any negative consequences of that choice remains between those parties. Relying on a professional, does not absolve you from your responsibility.
The corporation argued that the CRA failed to properly consider its reason for the late-filing of its tax return, namely that its accountant had moved offices. In court, the owner argued that this was a matter out of the corporation’s control and that the corporation should not be penalized as a result.