INCOME TAX
Penalties
Appeals from denial of judicial review applications seeking to set aside refusal by Canada Customs and Revenue Agency (CCRA) to waive interest, penalties regarding income tax, GST liability—Under Income Tax Act, Excise Tax Act Minister having broad discretion to waive interest, penalties—Minister issued guidelines setting out non‑ exhaustive list of factors considered in exercising statutory discretion, including taxpayer’s compliance record, whether causing undue financial hardship to demand payment— Exercise of discretion reviewable on unreasonableness simpliciter standard—Minister’s reasons for waiver refusal not withstanding somewhat probing examination—Appellants based request on undue financial hardship—Fairness determination requiring calculation of taxpayers’ indebtedness to CCRA, assets available to discharge debts—Serious errors in CCRA’s calculations—Official considered amount of interest, penalties but not tax owing—Cannot determine hardship without considering taxpayer’s total indebtedness to CCRA—Calculation based on equity in property acquired in peak year in real estate market, ignored fact market sharply declined shortly after purchase—Purchase price not proving current value, amount for which property could now be sold, mortgaged—Appeals allowed, matters remitted to Minister for redetermination—Income Tax Act, R.S.C., 1985 (5th Supp.), c. 1, s. 220(3.1) (as enacted by S.C. 1994, c. 7, Sch. II, s. 181; Sch. VIII, s. 127)—Excise Tax Act, R.S.C., 1985, c. E‑13, s. 281.1 (as enacted by S.C. 1993, c. 27, s. 127).
Nail Centre and Esthetics Salon v. Canada (Customs and Revenue Agency) (A‑391‑04, A‑392‑04, A‑393‑04, A‑493‑04, 2005 FCA 166, Evans J.A., judgment dated 5/5/05, 5 pp.)