Appealing the Notice of Reassessment

When the Canada Revenue Agency believes that a tax return of a given year was filed incorrectly or with errors, they will usually issue a Notice of Reassessment to the taxpayer highlighting the changes to their returns for that year or years. The taxpayer’s first step in disputing the CRA’s Reassessment is to file a Notice of Objection with the CRA. In effect, a Notice of Objection is effectively a request for an internal review of their file at the CRA by an Appeals Officer with a mandate to take an independent look at the file. This must be done within 90 days from the date of the Reassessment.

 

After the Notice of Objection has been filed, an Appeals Officer from the CRA will be assigned to the file to conduct an independent review of the taxpayer’s returns that are in dispute. Typically, Appeals Officers will allow the taxpayer to make further submissions and present their legal and factual positions for the amounts that are in dispute. Both the Notice of Objection and any follow-up submissions should be written within the legal framework provided by the Income Tax Act, the Excise Tax Act, and established case law.

 

Once all submissions have been made, the objection process will usually end in one of three ways.

(1)   The Reassessments can be vacated, which means that the Appeals Officer accepts the taxpayer’s position and voids the Reassessments in question.

(2)   The Appeals Officer can come to a conclusion, independent from both the taxpayer’s and the CRA’s positions based on the information provided. In such cases, new Reassessments would be issued.

(3)   The Reassessments can be confirmed, meaning that the Appeals Officer would reject the taxpayer’s position in favour of the original Reassessments, and will issue a Notice of Confirmation.

 

If the taxpayer disagrees with the Appeals Officer’s final decision. The taxpayer can appeal to the Tax Court of Canada. Like with the objection, this has to be done within 90 days of receiving the Notice of Reassessment or Notice of Confirmation.

 

When should you hire a tax lawyer to represent you?

There is no single correct answer to when you should hire a tax lawyer in the tax dispute process as it will usually depend on a number of factors, including the amounts in dispute and the specific case in question. Generally speaking, there are a number of advantages to consulting a tax lawyer after receiving a reassessment from the CRA. For one, a tax lawyer can provide a professional legal opinion on the merits of your dispute. After all, no one wants to wait until they are already at trial and knee-deep in legal fees to learn that they never had a case from the start. It is also generally more cost-effective to resolve a tax dispute with an Appeals Officer rather than in the Tax Court of Canada. If you are having issues with the CRA, consider consulting a Canadian Tax Lawyer before entering into the dispute.

 

DISCLAIMER: Please note this article is not legal advice. Always consult a lawyer for legal advice regarding your particular situation. The article is not necessarily a complete and accurate picture of the law – it is an article of a general nature.

Published on March 21, 2022