Skip to Content News Archives Economy Energy Oil & Gas Renewables Electric Vehicles Mining Commodities Agriculture Real Estate Mortgages Mortgage Rates Finance Banking Insurance Fintech Cryptocurrency Work Wealth Smart Money Wealth Management Investor Personal Finance Family Finance Retirement Taxes High Net Worth FP Comment Executive Women Puzzmo Newsletters Financial Times Business Essentials More Innovation Information Technology FP500 Podcasts Small Business Lives Told Tails Told Shopping Financial Post Store Obituaries Place a Notice Advertising Advertising With Us Advertising Solutions Postmedia Ad Manager Sponsorship Requests Classifieds Place a Classifieds ad Working Profile Settings My Subscriptions Saved Articles My Offers Newsletters Customer Service FAQ News Economy Energy Mining Real Estate Finance Work Wealth Investor FP Comment Executive Women Puzzmo Newsletters Financial Times Business Essentials HomePersonal FinanceTaxesCRA denies taxpayer's request for relief from penalties and interest after failing to report all her incomeCheck your slips — Failure to report income, even if by innocent mistake, can give rise to penalties and interestLast updated 3 hours ago You can save this article by registering for free here. Or sign-in if you have an account.As a judge recently reminded us, “It is always the responsibility of the taxpayer to file an accurate income tax return… Even if they use commercial software or the CRA’s auto-fill feature." Photo by Erick Eterosa/Adobe StockWe independently select everything we recommend. Buying through us may earn us a commission, which supports our work.With the 2025 tax season now behind us, it may be worth your time over the summer months to log in to your Canada Revenue Agency account to view all of the 2025 T-slips that the CRA has on file for you to ensure that you’ve fully captured, and reported, all of your income for 2025. This is particularly important for those who filed early, especially if you used CRA’s auto-fill feature before all your slips showed up online. The goal is to catch any income omissions and adjust your return, before the agency catches you in CRA’s annual matching program.Subscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman, and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.Subscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one account.Share your thoughts and join the conversation in the comments.Enjoy additional articles per month.Get email updates from your favourite authors.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one accountShare your thoughts and join the conversation in the commentsEnjoy additional articles per monthGet email updates from your favourite authorsSign In or Create an AccountorFailure to report income, even if it’s the result of a purely innocent mistake, can give rise to penalties and interest. That’s what happened to one taxpayer who appeared before the federal court in Vancouver in late May, seeking a judicial review of a decision of the CRA denying her request for relief from penalties and interest.Get the latest headlines, breaking news and columns.By signing up you consent to receive the above newsletter from Postmedia Network Inc.A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Top Stories will soon be in your inbox.We encountered an issue signing you up. Please try againBefore delving into the facts of the case, let’s review the rules for omitting income. Under the Income Tax Act, if you fail to report at least $500 of income in a tax year, and in any of the three preceding taxation years, you can be hit with a “repeated failure to report income” federal penalty. This is calculated as the lesser of 10 per cent of the unreported income, and 50 per cent of the difference between the understatement of tax (or the overstatement of tax credits) related to the omission, and the amount of any tax paid in respect of the unreported amount, for example, by an employer through source deductions withheld. A corresponding provincial 10 per cent penalty is also often assessed.For example, if you forgot to report more than $500 of income you received in 2025, and also forgot to report more than $500 in income in any of your 2022, 2023 or 2024 returns, you can be hit with this failure-to-report penalty.In the recent case, the taxpayer filed her 2021 income tax return in early March 2022. She failed to include two T5 slips from TD Waterhouse and Equitable Bank that she says she received only after she had filed her return. Upon noticing this omission, the CRA reassessed her but did not impose a penalty.Unfortunately, a similar situation arose in 2023 when the taxpayer filed her 2022 income tax return in late March 2023, but inadvertently omitted T5 slips from TD Waterhouse, claiming the slips were not available on the CRA’s auto-fill service when she used commercial software to prepare her return. For the 2022 tax year, her undeclared income was more than $23,000. She was therefore reassessed by the CRA in October 2023, and a penalty of $2,925 was applied, along with $636 in non-deductible arrears interest.After receiving her reassessment notice, with the penalty and interest, the taxpayer applied to the CRA under the taxpayer relief provisions of the Act. Three successive decisions were made, by different CRA officers, denying her request for relief. The recent judicial review surrounded the third decision in which the CRA officer had noted that the agency had received the omitted slips before the end of February 2023. It had processed them in April 2023, so that they would have been available to the taxpayer before the deadline to file her 2022 income tax return, being April 30, 2023.During the six months that elapsed between the moment the slips were available and the time that CRA reassessed the taxpayer, the taxpayer failed to correct the omission. As the CRA officer wrote, “This was not a situation beyond her control, especially because she communicated multiple times with the CRA to ask for other adjustments to be made to her return during this period.”The CRA officer went on to say that even if the taxpayer hadn’t received the necessary slips before April 30, she should have estimated her income based on statements from her financial institution which show the income earned during the year. As a result, the CRA denied her request for relief, so the taxpayer turned to court.As in prior such cases, the role of the federal court is limited in that it doesn’t have the discretion to change the CRA’s decision merely because the judge disagrees with it. Rather, the federal court can only intervene if the taxpayer shows that the decision was “unreasonable.”In court, the taxpayer argued that she acted “diligently and in good faith,” and that her failure to declare certain amounts in her income was due to the fault of her financial institution’s failure to issue her electronic T5 slips in time. She argued that taxpayers ought to be notified when new information becomes available on the CRA’s auto-fill service, otherwise, how are they to know if a new slip was later added?The judge noted that all these factors were, indeed, considered by the CRA when making its decision to deny interest and penalty relief, but the CRA officer concluded that various other factors, such as the magnitude of the amount omitted, and the fact that this was the second time the taxpayer failed to report income, “tipped the scales in favour of denying relief.”As the judge reminded us, “It is always the responsibility of the taxpayer to file an accurate income tax return. … Even if they use commercial software or the CRA’s auto-fill feature, taxpayers must ensure that all their income is declared. It is reasonable to expect taxpayers to have knowledge of their sources of income.”Jamie Golombek, FCPA, FCA, CFP, CLU, TEP, is the managing director, Tax & Estate Planning with CIBC Private Wealth in Toronto. Jamie.Golombek@cibc.com.If you liked this story, sign up for more in the FP Investor newsletter. Join the Conversation This website uses cookies to personalize your content (including ads), and allows us to analyze our traffic. Read more about cookies here. By continuing to use our site, you agree to our Terms of Use and Privacy Policy.