The Tax Court of Canada has criticized the Canada Revenue Agency (CRA) for making a “stupid mistake” in miscalculating a taxpayer’s income, but ruled it cannot correct the error because the filer missed the deadline to object.
“There is nothing the court can do,” wrote Justice David Spiro. “Although the Agency made a stupid mistake in reassessing, I have no discretion to extend the time limitations set out in the Act.”
The case involved Amarpal Singh, a real estate agent from Delta, B.C., who argued the CRA mistakenly counted his income twice after his employer issued an amended T4 slip.
Singh originally reported $53,258 in commissions from Nationwide Realty Corporation, which later revised the amount to $55,074. Instead of replacing the original figure, the CRA added both amounts together, incorrectly inflating Singh’s 2019 income to $108,332.
Singh testified he only discovered the error after receiving a notice of reassessment. He said he contacted the CRA twice and was told the mistake would be corrected, but no action was taken before the 90-day deadline to object expired on January 10, 2023.
He also missed the subsequent deadline to request an extension.
While federal courts have previously ruled that enforcing strict deadlines in cases of clear errors can be unreasonable, Spiro said he had no choice but to uphold the reassessment.
In a similar 2019 case, a judge faulted the CRA for refusing to acknowledge that Revera Long Term Care Inc. of Mississauga had mistakenly over-reported its income by $18 million, a miscalculation the company only discovered five years later.
“The decision is unreasonable,” Justice Shirzad Ahmed wrote in that case, noting that the Income Tax Act allows for exceptions. Revera, which had overpaid taxes due to “carelessness,” ultimately sought a refund.
Despite Singh’s frustration, the ruling means he remains on the hook for taxes on an income nearly double what he actually earned.