Bilida v. M.N.R.
T-2728-94
Jerome A.C.J.
18/12/96
8 pp.
Judicial review of decision of Chief of Appeals not to waive interest assessed with respect to 1986 to 1989 taxation years-Taxpayer retired 76-year-old widow-On advice of tax accountant retained to prepare tax returns, taxpayer claiming farm losses against other income since 1981-In 1988 Revenue Canada indicating losses not allowed, and in 1990 advising owed $41,992.99, including $10,892.14 in interest-Taxpayer forced to borrow, sell townhome to pay amount owing-Income Tax Act, s. 220(3.1) permitting Minister to waive, cancel all or any portion of penalty or interest-Departmental guidelines indicating cancelling, waiving interest warranted where interest or penalty arising primarily because of actions of Revenue Canada, including delay, and where inability to pay amounts owing-Factors to be considered including whether history of compliance with tax obligations-Application allowed-Discretionary power under s. 220(3.1) must be exercised in good faith in accordance with principles of natural justice, taking into account all relevant considerations and without regard to irrelevant or extraneous ones-Decision not to waive interest made without regard to department's guidelines, taxpayer's particular circumstances-No consideration of taxpayer's ability to pay-Revenue Canada's delay in assessing contributing to accumulation of arrears, penalties, interest-Taxpayer relied on Revenue Canada's review of selfassessments and continued practice until 1990-Had Department notified taxpayer sooner claim for farm losses would not be allowed, would have stopped claiming losses against income, thereby preventing further arrears and accruing interest-Department not taking into account considerations outlined in guidelines i.e. history of compliance with tax obligations, consistently filing tax returns on time, payment of taxes, penalties, interest as soon as advised amounts outstanding, retaining tax accountant-Income Tax Act, R.S.C., 1985 (5th Supp.), c. I-1, s. 220(3.1) (as am. by S.C. 1994, c. 7, Sch. VIII, s. 127).