The taxpayer bears the onus of refuting a net worth assessment or a similar type of assessment. The author summarizes a number of approaches that have worked in the courts as follows:
- Adequate records can defeat blunt assessments (Mensah v R, 2008 TCC 378)
- CRA assumptions must be reasonable (Berezuik, 2010 TCC 296)
- Taxpayers can advance their own calculations (Dionne, 2012 TCC 136)
- Not every deposit is income (Premier Fasteners, 2026 TCC 2) (gifts, loans, gambling winnings or dispositions of personal property, all of which can be supported by credible testimony where documentation is lacking)
- Limitation periods increase scrutiny of the CRA’s approach (Fuhr, 2024 TCC 43)
- Penalties are not automatic (Khanna, 2022 FCA 84)
The author refers to Andrea Damiani, Jacqueline Fehr, and Michelle Moriartey, “Anatomy Updated: Navigating Net Worth Assessments,” in 2025 British Columbia Tax Conference (Toronto: Canadian Tax Foundation, 2025), 15: 1-76.
Stanley Oghenevwairhe Omotor “Successfully Challenging Alternative Assessments” Canadian Tax Focus 16:2 (May 2026)
