Background
The Minister reassessed the Estate of Troy E. Ducharme for approximately $15.8 million in penalties relating to failures to file Forms T1134 and T1135 for the 2014 taxation year. The notices were dated March 17, 2023. The Crown moved to quash the Estate’s appeal, arguing that the notices had been mailed on that date and that the Estate’s April 24, 2025 notices of objection were therefore filed after all available deadlines had expired.
The Estate maintained that the penalty reassessments were not mailed before March 3, 2025. Its trustee said she received them on March 11, 2025, after an Estate adviser first learned of them during a January 2025 call with the Canada Revenue Agency. The Estate had separately and timely objected to related reassessments totaling approximately $360.2 million.
The Court’s Holding
The Tax Court dismissed the Crown’s motion to quash. It found, on a balance of probabilities, that the penalty reassessment notices were not mailed to the Estate before March 3, 2025. The Estate’s April 24, 2025 objections were therefore valid, permitting its appeal to proceed.
The CRA’s affidavit intended to invoke the Income Tax Act’s evidentiary rule for proof of mailing stated only that the notices were “issued,” not “mailed,” and thus did not satisfy subsection 244(10). The Crown’s remaining evidence established that the notices had been printed and described the CRA’s usual mailing procedures, but it did not include the relevant batch headers or other direct evidence connecting these particular notices to a 2023 mailing event.
By contrast, the Estate presented unchallenged evidence that its trustee and adviser had handled its tax affairs diligently, did not learn of the penalty reassessments until 2025, and acted promptly after receiving them. The Court ordered the Crown to file its reply to the notice of appeal within 60 days, with costs of the motion in the cause.
Key Takeaways
- When a taxpayer disputes mailing, the Minister must prove on a balance of probabilities that the reassessment notice was mailed before statutory presumptions about its mailing date apply.
- An affidavit saying that a notice was “issued” does not necessarily satisfy the statutory requirement for evidence that it was “mailed.”
- Evidence of standard CRA procedures and printing, without records linking the particular notices to an actual mailing event, may be outweighed by credible and unchallenged taxpayer evidence.
Why It Matters
The decision illustrates that the date printed on a reassessment does not by itself establish when it was mailed for purposes of objection and appeal deadlines. Where the CRA cannot connect a specific notice to its mailing process, taxpayers may preserve access to the Tax Court through detailed, credible evidence about their document-handling practices and the date they first received the notice.