What is the nature of the third-party penalty in section 163.2
of the Income Tax Act? That question will be answered by
the Supreme Court of Canada when it decides the case of Guindon
v. The Queen (Docket No. 35519) on Friday July 31.
See our previous posts on the Guindon case
In Guindon, the Tax Court found that the penalty
imposed under section 163.2 is a criminal penalty, not a civil one,
and therefore subject to the protection of (inter alia)
section 11 of the Charter of Rights and Freedoms.
The Federal Court of Appeal reversed on the basis that Ms.
Guindon did not provide notice of a constitutional question, and
thus the Tax Court lacked jurisdiction to make an order on the
nature of section 163.2. In any event, the Federal Court of Appeal
also stated that the penalty under section 163.2 was not criminal
in nature, and hence, was not subject to Charter
The Supreme Court heard arguments in Guindon in
December 2014, and the Court's decision will have significant
implications for tax professionals across Canada.
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