Employment Expenses: CRA Can Reassess Older Years

A June 17, 2026 Tax Court of Canada case reviewed employment expenses claimed against commission income of $56,776 in 2017 and $61,772 in 2018. The claims included vehicle, phone, cable, internet, marketing consulting and other costs. CRA also reassessed the 2017 year beyond the normal reassessment period.

Why Were the Expenses Denied?

With the exception of $7,000 conceded by CRA, the court upheld the denial of the expenses. Key problems included:

• Insufficient evidence that the employer required the expenses
• No adequate vehicle-expense records or allocation between business and personal use
• No reliable allocation of cellphone, internet or cable costs
• Insufficient proof of marketing consulting payments
• A laptop purchase that was not required by the employment contract or shown to be used to earn employment income

Why Was an Older Year Still Open to Reassessment?

The taxpayer acknowledged receiving the prepared return from his accountant shortly before the filing deadline, without sufficient time to review it fully, and not reviewing it after filing. The court found a lack of reasonable care, including missing receipts and unsupported personal-use allocations. These misrepresentations permitted CRA to reassess outside the normal period.

Action: Review returns before filing, keep supporting receipts and contemporaneous records, and use reasonable, supportable methods to allocate mixed personal and employment expenses.