Law360 Canada ( July 13, 2022, 6:39 AM EDT) -- Appeal by the wife (“appellant”) from the findings that appellant was liable for penalties in her 2008 taxation year, on the grounds that the Tax Court erred in concluding the respondent established that the appellant made a misrepresentation that amounted to gross negligence. The Minister of National Revenue (“Minister”) reassessed the appellant and her husband with respect to their 2008 taxation years, and the 2009 taxation year for the husband. The reassessments had imposed penalties. The appellant and her husband appealed the reassessments to the Tax Court of Canada. However, at the commencement of the Tax Court hearing, they conceded they had unreported income in 2008 as assessed by the Minister. The only issues before the Tax Court were whether the husband’s 2009 assessment was correct and whether the appellant and her husband were liable for penalties. The Tax Court dismissed the appeals, finding both liable for the penalties in 2008, and upholding the assessment of the husband’s 2009 taxation year. While both appealed that decision, the husband made no arguments in support of his appeal and thus his appeal was dismissed. The only remaining issue was whether the appellant was liable for penalties in her 2008 taxation year. The appellant conceded her return did not report all her income in 2008, so there was no doubt the respondent established a misrepresentation. However, she submitted the Tax Court erred in concluding that the respondent established the second condition; namely, that the appellant made the misrepresentation knowingly or under circumstances amounting to gross negligence....