Subparagraph 152(4)(a)(i) of the Income Tax Act lets the Canada Revenue Agency reassess a taxpayer after the normal reassessment period where the taxpayer made a misrepresentation attributable to neglect, carelessness, or wilful default, or committed fraud in filing the return or supplying information.
The Crown bears the onus of establishing both the misrepresentation and the required degree of fault, and the misrepresentation must relate to a matter relevant to determining tax payable. Many net worth assessments and other reconstructions reach back beyond the normal period under this provision. A common response is that the misrepresentation was an honest error rather than neglect or carelessness, though the analysis is fact-specific.