Tax Tidbits: Fuel Tax, Missing Income and T1135

Temporary Federal Fuel Excise Tax Relief

The federal government announced an extension of the temporary suspension of the federal fuel excise tax through January 31, 2027. It also announced that 50% of the regular excise tax rate would apply from February 1 through March 31, 2027.

Missing a Tax Slip Is Not a Defence

Income must still be reported even when the expected tax slip never arrives. Repeated failures to report $500 or more of income within a four-year period may lead to a penalty. A recent court case confirmed that simply waiting for CRA to find missing income does not protect a taxpayer from that penalty.

Foreign Property Reporting: Refunds Do Not Eliminate Penalties

Taxpayers required to file a T1135 Foreign Income Verification Statement must meet its reporting deadline, even when their income tax return is expected to produce a refund. A recent case upheld penalties of $2,500 plus interest for each taxpayer who filed the T1135 late.

Action: Verify income against your own records rather than relying solely on tax slips, and maintain a separate checklist for foreign-property reporting obligations.