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February 20, 2013 at 10:01 AM

MARIJUANA BUSINESS

In an October 17, 2012 Tax Court of Canada case, CRA reassessed the Appellant using the net worth assessment method and included unreported business income for the Appellant’s 2004, 2005 and 2006 tax years and assessed gross negligence penalties on the unreported amounts with respect to her business of growing and selling marijuana.

Taxpayer Loses - Big Time

                        The Court concluded that the Appellant had made a false statement or omission in filing her tax which was attributable to gross negligence.

These net worth assessments were also made beyond the normal reassessment period which means that the onus was on the CRA to establish a misrepresentation attributable to neglect, carelessness, willful default or fraud.

Tax Tips & Traps 2013