Non-Resident TFSA & Investments - CRA Calling
I have a friend who is a non-resident of Canada (living abroad for past couple of years). His bank still had his address listed within Canada (he had listed his brothers house for correspondence).
A year ago, he started up an non-registered investment account. While talking to the bank financial adviser, he mentioned he was living abroad and a non resident (verbal only). His other friend at the time also suggested maxing out his TFSA (Not knowing that a non-resident, TFSA contributions accumulate a steep 1% monthly penalty).
Long story short, the CRA recently sent my friend a letter asking him to file his taxes. The bank had sent him a T5 slip, which they send to resident investments. He requested the bank instead provide him with an NR4, which is a non-resident investment slip. The bank said they would look to rectify the issue.
The bank then noticed the TFSA issue, and declined to do anything for him, stating he had signed the forms which showed a mailing address in Canada. My friend assumes that they do not want to rectify the T5/NR4 issue, as that may lead to them being responsible for the TFSA penalties.
What are my friends options now considering the following:
- The forms he signed to open up the accounts required both the Husband and Wife to sign as it was a joint account. The bank adviser at the time told my friend (the husband) to go ahead and sign both lines to speed up the paper work, since his wife was not available. Is this an avenue a reviewing panel/lawyer can push/work with?
- Would the CRA be lenient on the 1% monthly TFSA penalty tax considering the circumstances?
- Any other options you guys can think of?
Thanks for your time.