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MYCRA LOCKOUTS HAVE REAL TAX COSTS

MINOR COURT WIN FOR TAXPAYERS WITH PORTAL ISSUES – BUT LITTLE REAL RELIEF

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A recent Federal Court (“FC”) case is a minor win for taxpayers who have struggled with the buggy, confusing mess that is the MyCRA web portal (“MyCRA”) run by Canada Revenue Agency (“CRA”). It also brings to light how serious MyCRA access issues can become.

In the French-language case Haddad c. Canada (Procureur général),2026 CF 614 (“Haddad”) the FC confirmed that the CRA must address a taxpayer’s MyCRA access issues if the taxpayer applies for relief after unknowingly sustaining penalties while locked out of MyCRA. However, the case does NOT say that the CRA must grant any form of relief in such cases.

In this Indirect Tax Report, we review Haddad and what it says about the potential tax consequences of MyCRA access issues.

Background to the Haddad Case

In June 2020, the CRA sent the Appellant a message over MyCRA indicating that he had made excess contributions to his Tax-Free Savings Account (“TFSA”). The CRA then emailed him a generic alert that there was a new message in his MyCRA inbox (the “2020 Email”).

Unfortunately, the Appellant was locked out of his MyCRA and had no time, due to work, to wait for hours on hold with the short-staffed pandemic-era MyCRA helpline. Consequently, he never saw the message on MyCRA and continued to over-contribute to his TFSA for four years, unknowingly racking up penalties.

The Appellant only realized something was amiss in 2024 when he called the CRA about withdrawing funds from his TFSA. He immediately applied for penalty relief under the "reasonable error" provisions in section 207.06(1) of the Income Tax Act. The CRA refused, arguing that the 2020 Email was sufficient notice. As a last resort, he applied to the FC for judicial review of that decision.

The FC’s Decision

The FC disagreed with the CRA, allowing the taxpayer's application for judicial review, overturning the refusal, and sending the matter back to the CRA for re-consideration.

While the FC agreed that general ignorance of the law does not constitute a "reasonable error," it found that when the CRA refused the Appellant’s application for relief, it completely failed to address the Appellant’s core argument: that genuine access issues prevented him from ever seeing the messages on MyCRA.

Implications for Taxpayers

Crucially, the FC did not rule that the Appellant’s penalties must be waived due to his portal issues. It merely ordered the CRA to actually address that argument — meaning a different CRA officer could still deny the request upon review.

Takeaways

Haddad is a minor victory for the taxpayer: it shows that that the CRA must at least address a taxpayer’s MyCRA access issues if the taxpayer applies for relief after unknowingly sustaining penalties while locked out of MyCRA. Ultimately, though, Haddad demonstrates that taxpayers MUST take all steps possible to gain access to MyCRA, if locked out. Those access issues can have real tax consequences.

As always, it is advisable to seek Experienced Tax Counsel at the first sign of trouble with the CRA.

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