Bill, an accountant, lives in an exclusive neighbourhood where house prices are in excess of $1,000,000. He has recently become friendly with a new neighbour and in March the neighbour hired Bill to prepare his personal tax return. The neighbour gave Bill a T4 reporting $60,000 of income. Thinking that the income was on the low side, Bill asked if this was all the income he had and the neighbour replied that it was. Bill did not ask any further questions but prepared the tax return. When the neighbour's tax return was audited by the CRA, it was discovered that he had in excess of $300,000 in income for the year.
REQUIRED
Advise Bill as to whether he is at risk of being assessed under the civil penalty provisions in the Act.