141ANot taking reasonable care

1. A taxpayer is liable to pay a shortfall penalty if the taxpayer does not take reasonable care in taking a taxpayer's tax position (referred to as not taking reasonable care) and the taking of that tax position by that taxpayer results in a tax shortfall.

2. The penalty payable for not taking reasonable care is 20% of the resulting tax shortfall.

3. A taxpayer who, in taking a tax position, relies on an action or advice of a tax advisor engaged by the taxpayer, or by a company in the same group of companies as the taxpayer, takes reasonable care in relying on the action or advice except if the taxpayer—

4. is the employer of the tax advisor:
5. does not provide to the tax advisor adequate information relating to the tax position:
6. does not provide to the tax advisor adequate instructions relating to the tax position:
7. has reason to believe that the action or advice is incorrect:
8. has previously, for a period ending less than 4 years before the beginning of the period to which the tax position relates, had a tax shortfall for the same type of tax arising from a corresponding tax position and does not take reasonable care to avoid the further tax shortfall.

9. A taxpayer who takes an acceptable tax position is also a taxpayer who has taken reasonable care in taking the taxpayer's tax position.

10. Subsection (3) and section 141B(1B) do not exclude a taxpayer who makes a mistake in the calculation or recording of numbers in a return from being liable for a penalty for not taking reasonable care.

11. Repealed