The gross-negligence penalty under section 163(2) of the Income Tax Act equals the greater of $100 and 50% of the tax related to a false statement or omission, where the taxpayer knowingly made it, or made it in circumstances amounting to gross negligence. The Crown bears the onus of proving the penalty applies.
Gross negligence requires a high degree of negligence — more than mere carelessness. The leading case describes it as a high degree of negligence tantamount to intentional acting, or indifference to whether the law is complied with. A reasonable explanation, due diligence, reasonable reliance on a professional, and the complexity of the underlying facts can each defeat the penalty even where the underlying assessment stands.