Federal court judge slams tax trap on TFSA overcontributions

The taxpayer’s TFSA woes began back in December 2017, when he opened a TFSA with online broker Qtrade. His portfolio consisted largely of penny stocks. In 2018, he also contributed to a separate Sun Life Financial Inc. TFSA. He contributed a total of $183,000 to his TFSA accounts, resulting in a total overcontribution of $131,719. In July 2019, the CRA issued the taxpayer a TFSA Notice of Assessment (NOA) for 2018 resulting in $6,424 of tax, interest and penalties. The taxpayer received this NOA, but claimed that he misunderstood it, believing that it applied to unpaid regular income tax, and therefore simply paid it.