In a previous blog, we discussed the CRA Notice of Assessment and how to interpret and understand the information contained within. The Notice of Assessment represents the CRA’s conclusion and assessment of the result of an individual’s tax filing. However, does it necessarily represent the final say on the matter? What are your next steps if you disagree with the assessment or revised assessment? If you object to the findings contained in the NOA, your first step is contacting the CRA to ask questions and gather any additional information you might need. If this does not easily resolve your situation, you then have the right to file what is called a Notice of Objection.
What is a ‘Notice of Objection’?
A Notice of Objection is the method by which an individual or business can inform the CRA that they disagree with its assessment of their income situation and/or taxes payable. The CRA doesn’t always get it right, and a dispute with the CRA can be time-consuming, complex and frustrating. When disagreements arise, taxpayers can dispute a (re)assessment of tax, interest, or penalty by the CRA by filing a formal appeal, called a Notice of Objection, to the Appeals Division of the CRA.
This can be done in one of three ways:
- File an official Objection using form T400A. Once completed, the form should be sent to the Chief of Appeals at your closest Tax Services Office (the three closest locations to our office in Burlington are in Hamilton, Mississauga and Kitchener/Waterloo);
- Have your financial representative/accountant file a Notice of Objection on your behalf; or
- Register a formal dispute online through My Account or My Business Account.
Appealing a (re)assessment is a time-sensitive process. Objections must be filed within 90 days of the date of the (re)assessments and must list and describe each issue in dispute, the relief being sought and why, and provide all relevant documentation that supports the objection.
Winning a tax dispute hinges on the taxpayer’s ability to convincingly disprove assertions and assumptions made by CRA. The advice and assistance of experienced professionals is a crucial advantage that taxpayers should leverage to improve their chances of success.
The Taxpayer Bill of Rights
The Taxpayer Bill of Rights from the CRA outlines the obligations of the CRA with respect to Canadian taxpayers, including the onus on the CRA to act with professionalism, integrity and collaboration with taxpayers. The list of rights is extensive, however, a key feature of the Bill of Rights holds that taxpayers are not obligated to pay more than what is required by law. Further, in cases where an individual or corporate taxpayer feels the CRA has made an error in its assessment of taxes owing, that person or business has a right to appeal the decision.
Can you sue the CRA?
Taxpayers who have been treated badly by the Canada Revenue Agency often wonder whether they can sue. The answer is yes. However, it is important to realize two things:
First, suing the CRA does not necessarily have anything to do with contesting a tax assessment, and the Agency’s actions are almost always irrelevant when you are appealing your assessment. The fact that the auditor did things he or she should not have, or that Collections officials overstepped their authority, or that a supervisor did not return your calls before the assessment was issued, generally has no bearing on your appeal, and the judge will ignore these issues. The only thing that matters on an appeal to the Tax Court of Canada is whether the assessment is correct. (There are some situations where, if the CRA obtained information illegally, they cannot use that information in Court, but this is generally limited to criminal prosecutions where you are protected by the Charter of Rights.)
Second, if Agency officials were acting within the bounds of their authority and were not acting maliciously, you will not succeed in a lawsuit simply because they did something wrong. You will normally have to show negligence or malice.
A lawsuit against the CRA for negligent or malicious acts can be brought in either Federal Court or the province’s superior court. Note that there may be short time limits within which you must start your lawsuit and that these can vary by province (based on the Crown Liability and Proceedings Act).
For Assistance in Dealing with the CRA or Filing a Notice of Objection, Contact Edelkoort Smethurst Schein in Burlington
If after reading this blog, you would like to pursue an appeal of a decision of the CRA, please contact the CPAs at ESS CPAs LLP. Our Chartered Professional Accountants can guide you through an appeal and even represent you in a dispute with the CRA. Please reach out to us by calling 905-517-2297 or contact us online.