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Notes
(1) This penalty applies only where the taxpayer has been subject to the “first occurrence”
penalty within the three preceding taxation years and a demand for the income tax return
has been made by the Canada Revenue Agency (CRA).
(2) In respect of the Partnership Information Return, where there has previously been a
“first-occurrence” penalty within the three preceding taxation years and a demand for the
return has been made by the CRA, an additional penalty of $100 per partner is levied for
each month or partial month (not exceeding 24 months) that the failure continues. There
is also a penalty for failure to file a tax shelter information return equal to 25% of the
greater of cost of shelters sold prior to date that the demand for the return was made by
the CRA and the total value that an investor in the tax shelter could donate under a gifting
arrangement (as defined in the Income Tax Act).
(3) These penalties are imposed where a taxpayer knowingly, or under circumstances
amounting to gross negligence, fails to file certain information returns (i.e., Forms T106,
T1134, T1135, T1141, and T1142, as discussed in the table “Other Selected Federal Filing
Deadlines”). Where the taxpayer fails, knowingly or under circumstances amounting to
gross negligence, to comply with a demand made by the CRA to file a foreign-based
information return, the penalty is increased to $1,000 per month to a maximum of 24
months.
(4) This penalty is not applicable where a reasonable attempt was made to obtain the
outstanding information, or where a Social Insurance Number was applied but not
received at the time the return was filed. There is also a penalty for failure to provide tax
shelter information equal to the greater of $500 or 25% of the greater of cost of shelters
sold prior to date that the demand for the return was made by the CRA and the total value
that an investor in the tax shelter could donate under a gifting arrangement (as defined in
the Income Tax Act).
Selected Federal Penalty and Offence Provisions
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