About 66,000 Canadians got a warning letter this spring saying their tax-free savings accounts weren't so tax-free after all.
The Canada Revenue Agency sent the mailouts demanding a penalty tax for overcontributions to the TFSAs for the 2012 taxation year.
Canadians could put $5,000 into the accounts in 2012.
But a sometimes misunderstood wrinkle does not allow them to take money out and put it back in during the same calendar year - they have to wait until a later year.
The number caught by the wrinkle is down from 76,000 last year, but remains stubbornly high, despite education campaigns by banks and others.
A government spokesman says the number of people who fall afoul of the rule is a tiny fraction of some nine million account holders.
Philippe Brideau says the agency can waive the penalty tax if the account holder offers a reasonable explanation.
(The Canadian Press)