If you trust your experienced accountant to file your tax returns rightly and you do not make any effort to review the return or ask basic questions, but the accountant makes a careless mistake, can CRA reassess you at any time? Yes, the “normal” 3-year reassessment period will not apply to you.
Here, the executors of the Estate had relied on the accountants who had acted for the late Mr. Vine for decades. The accountants were tax experts and they knew Mr. Vine’s properties. But they made a careless error, forgetting to report a capital gain and capital cost allowance recapture. Justice Campbell said that, though the errors of the accountants are not the errors of the taxpayer, the executors in this case could not show that they personally took reasonable care.
The executors could not show that they had done any one of the following: (a) “reviewed the return, had extensive conversations with accountants and asked relevant questions”; (b) “had formed a bona fide belief of the correctness of the return based on a recommended filing position by accountants and a CRA technical bulletin”; or (c) had relied on professional opinions. (Para. 39.)
“The fact that the Minister could have perceived the error is irrelevant.” Once you make a careless error in filing your return, your error allows CRA to reassess you any time. (Para. 43)