The “Investors” had “invested” in what turned out to be a Ponzi scheme under which for many years they paid income taxes on interest reported as being earned by them, with such interest being reinvested. At least some of the Investors had been invested in the scheme for over 10 years before it was discovered to be a fraud. Various of such Investors (all individuals) wish to have their income tax returns for the years in question adjusted in order to obtain a refund of the taxes they paid on such interest income.
The Directorate indicated that in the case of the years beyond the normal reassessment period, by virtue of the s. 152(4.2) relief provisions, the Minister may “at the request of a taxpayer, reassess for any taxation year on or before the day that is 10 calendar years after the end of that taxation year,” so that, for example, “under the relief provisions, a taxpayer may request an adjustment to the taxpayer’s income tax return for the 2008 taxation year … by December 31, 2018.” However, various of the taxation years were before the 10-year period and, accordingly, could not be so reassessed - and furthermore, "interest was to be added to taxpayers' income under paragraph 12(1)(c) in the year the taxpayers received it or were entitled to receive it."
The Directorate went on to indicate that potential relief could be provided though a subsequent bad debt deduction – likely, in the year in which the promoters were charged.