In Toastmaster Inc. v. MNR, 2012 FCA 317, the Canada Revenue Agency (CRA) denied the non-resident corporation’s request for discretionary relief from interest on taxes.  On a judicial review of that decision, the Federal Court upheld the CRA’s decision.  On a further appeal to the Federal Court of Appeal (FCA), the corporation argued that an “interest charge of over $600,000 on an ultimate tax balance of approximately $42,000 is absurd”.  In rejecting the corporation’s appeal, the FCA said that the apparent mismatch simply reflected the fact that large losses sustained in 2003 and 2004 were carried back to 2001 and 2002, and losses in 2006 and 2007 were carried back to 2005. Had the corporation timely filed its tax returns (as a non-resident carrying on business in Canada) when they were required to be filed for 2001, 2002, and 2005, the corporation would have had taxable income in those years, and would have been required to pay tax on that income.  Further, only in subsequent years, when the losses were incurred, could a request for a loss carryback have be made that would have resulted in a tax refund for the earlier years.  Accordingly, by late filing its tax returns for all years in this case, the corporation was seeking to benefit from an immediate application of the losses against the income.  The FCA essentially said that such a benefit would be inappropriate in these circumstances.