The Canada Revenue Agency (CRA) has been found blameless after misplacing a company's claim for $200,000 in credits, according to Blacklock’s Reporter. “Unfortunately, even when an error has been committed by the Canada Revenue Agency, the requirements of the Income Tax Act must be met,” said Tax Court of Canada Justice Ronald MacPhee in a ruling. While the outcome was frustrating, MacPhee said it followed the letter of the law. MacPhee blamed the CRA’s blunder on COVID-19 restrictions that sent most employees home to work. Canadian mobile phone company FOOi submitted its claim for tax credits for scientific research in 2019. After waiting four months without a reply, FOOi began calling the CRA, but it had problems reaching people. “As this was during the early days of the COVID-19 epidemic starting in mid-March 2020, Agency offices were understaffed or not staffed at all,” he said. The CRA acknowledged it lost FOOi’s paperwork. When it resubmitted its claim in 2021, it was denied tax credits and informed it had missed the 90-day deadline to file a notice of objection. “What we are doing here is wrangling about what kind of bad outcome befalls a taxpayer when the Canada Revenue Agency loses their material,” said an FOOi lawyer.MacPhee said the CRA was blameless. “When a taxpayer receives a Notice Of Assessment under the Act, to object to it one must send a written Notice Of Objection to the Chief of Appeals setting out the reasons for the objection and all relevant facts,” he said. Records showed the CRA logged thousands of complaints each year about misplaced paperwork. Misdirected mail incidents totalled 2,400 in 2016. Records published in 2023 showed the CRA de-registered numerous charities after misplacing their associated paperwork.READ MORE: 'It was atrocious' Canada Revenue Agency deregistered charities after misplacing their paperwork Groups that filed their tax returns were stripped of their charitable status after it lost the records, but it said they were never mailed. “It was atrocious,” said one charity director.
