INCOME TAX
PENALTIES
Judicial review of Canada Revenue Agency’s decision upholding decision to deny taxpayer relief from penalties, prosecution under Voluntary Disclosure Program (VDP)—CRA informing taxpayer GST return for first quarter of 2005 selected for audit—After several conversations with CRA officials, taxpayer requesting inclusion in VDP based on understanding met test for voluntariness, one of four essential conditions of VDP, for years other than 2005—Never warned as to negative consequences of voluntary disclosure—After making complete disclosure, taxpayer informed not qualified for VDP because enforcement action begun prior to disclosure—VDP Guidelines recognizing person entitled to know rights before making disclosure—CRA officials not following Guidelines—Profoundly unfair to allow taxpayer to continue under illusion entitled to VDP protection when made disclosure—Respondent estopped from denying taxpayer entitled to be considered as meeting voluntariness condition of VDP.
Wong v. M.N.R. (T-1797-06, 2007 FC 628, Phelan J., judgment dated 13/6/07, 14 pp.)