More than two years after paying out $4.99 million in an allegedly bogus refund, the Canada Revenue Agency is stuck in Federal Court trying to figure out where the money went and how to get it back.

The seven-figure refund was issued through the CRA’s automated processes in the spring of 2023 to Distribution Carflex Inc., a cash-strapped body shop in the Laurentians region of Quebec.

According to internal records obtained by the CBC’s the fifth estate and Radio-Canada, the $4.99-million transaction went through automatically, as it fell just short of a $5-million threshold for manual review in this type of tax refund.

A source with inside knowledge of the CRA’s workings said that returns are routinely processed electronically without human oversight, even in cases where millions are paid out that would later raise red flags.

“There should be eyeballs on that transaction, but there isn’t, and that’s the problem,” said the source.