Tax Attack!

In the recent Federal Court case, Sangha v Canada (A.G.), the taxpayer inadvertently over-contributed to his TFSA account.

The CRA first sent him a warning letter (referred to in the decision as the June 2017 Letter), the June 2017 Letter informed him that he should withdraw excess amounts immediately and that future excess contributions will be subject to a 1% tax per month pursuant to the Income Tax Act (ITA). In accordance with the letter, the taxpayer withdrew the entire balance of his TFSA. Unfortunately, he contributed an additional amount in September of the same year, which resulted in a further excess contribution. The CRA issued TFSA tax assessments for the two taxation years in which the taxpayer had excess contributions.

If you think you or your client may have excess contributions in TFSAs, review the CRA’s guide on taxes payable on TFSAs can be viewed here: CRA's communique on excess TFSA contributions and contact me if you have any questions by clicking on the button below. Click to read more

See May 12, 2020 National Post article. Some interesting comments on CERB and its administration:

"Employment minister Carla Qualtrough has said the government knew there was a heightened risk of fraud with the pandemic-aid programs but wanted to get the money out to Canadians in need as quickly as possible, working later to claw back any unwarranted payments... Marielle Hossack, a spokeswoman for Qualtrough, said the system was designed to disperse the funds quickly with “backend safeguards” to ensure that any payments made to ineligible recipients are eventually repaid."