12/08/2026
One dollar. That’s all it took for a retired CPA to become liable for a repeated failure to report income penalty. The Tax Court of Canada in Kryski v. The King (2026 TCC 145) upheld s. 163(1) penalties for a retired CPA who failed to declare $501 in 2022 and $12,715 in 2023.
The taxpayer earned her income from investments and from working occasionally as a movie extra. She had trouble receiving all the slips (T3, T5 and T4As) from various sources. So she chose to, essentially, under-report her income and “just wait for the CRA to assess me.” The Court did not find that the former CPA acted with due diligence (defence available under the section) and upheld the penalties.
The interesting part (or, rather, the sad part, if you ask the taxpayer) about the case is that only $1 made a difference in whether s. 163(1) applied or not. One of the conditions of s. 163(1) is that the repeated failure to report income must involve income of at least $500. In this case, she failed to report $501 in 2022, the entire $1 more than is required under the section.
We’ve been seeing more section 163(1) “repeated failure to report income” penalties from the CRA. This decision is a timely reminder that taxpayers cannot blindly rely on the CRA’s matching program to correct mistakes in their reporting. Even relatively small omissions can trigger penalties.
