ARTICLE · 15 JANUARY 2019

Income Tax Gross Negligence Penalties

Rotfleisch & Samulovitch P.C.

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The tax penalties levied under this section are called gross negligence penalties.

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Introduction – Income Tax Gross Negligence Penalties

Canadian individuals, corporations, and trusts which earn income during the year are generally required to pay income tax and file income tax returns. Taxpayers who do not file their income tax returns as and when required are subjected to a late filing tax penalty. If a taxpayer is audited by the CRA for income tax and the income tax auditor's analysis suggests that the taxpayer's return was inaccurate, the income tax auditor will propose corrective adjustments and consider applying an additional penalty under subsection 163(2) of the Income Tax Act. The tax penalties levied under this section are called gross negligence penalties.

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