If you disagree with an assessment or reassessment of your tax return by Canada Revenue Agency (CRA), and you want to appeal, you should consult a lawyer. In simple cases, you may be able to make an appeal on your own, although you may still want to consult a lawyer for advice.
If you disagree with an assessment or reassessment, you can first contact the General Inquiries line of CRA to discuss the matter with a representative.
If the matter is not resolved, you can formally object to the assessment or reassessment. You have a number of options for how to file an objection:
- Online submission, if you have an individual account or a business account registered online with CRA, select the option for Registering a Formal Dispute
- Writing to the Chief of Appeals at your tax services office or tax centre; or
- Using Form T400A, Objection – Income Tax Act available from Canada Revenue Agency
In all cases, you have to explain why you object to CRA's assessment and include all relevant facts and documents.
Objections must be received within 90 days from the date the Notice of Assessment or Reassessment was written. However, individual taxpayers may be able to file an objection within one year of filing a return even if the 90-day period has passed. You should call CRA to determine your deadline for appealing.
Once your objection has been received, an independent review will take place and you will usually be able to present information about your objection to an Appeals Officer who will make a decision.
Appealing to the Tax Court of Canada
If you do not agree with the Appeals Officer's decision, you have the right to appeal to the Tax Court of Canada within 90 days.
There are two ways to make an appeal to the Tax Court: an Informal Procedure and a General Procedure. The type of procedure you use will depend on the amount of money in dispute.
1. Informal Procedure
If you choose the Informal Procedure, you do not require a lawyer, although some people are represented by other professionals such as accountants.
You qualify to use the Informal Procedure if:
- the disputed amount of federal tax and penalties is not more than $12,000 per assessment;
- the disputed loss amount is not more than $24,000 per determination; or
- interest on federal tax and on penalties is the only matter in dispute.
There is no filing fee to file an appeal under the Informal Procedure.
Generally, decisions made through the Informal Procedure are final and you have no right to an appeal.
2. General Procedure
The General Procedure is a formal trial before a judge. The Tax Court of Canada will hear your appeal under the General Procedure regardless of the disputed amount.
The General Procedure follows formal court rules, and covers matters such as:
- filing of an appeal;
- rules of evidence;
- examinations for discovery; and
- production of documents.
There is a filing fee when appealing using the General Procedure, which is based on the amount of tax or penalty being disputed. Also, there are formal documents that must be filled out to make an appeal through the General Procedure.
Most people who go through the General Procedure are represented by a tax lawyer. Decisions made in a General Procedure may be appealed to the Federal Court of Appeal and to the Supreme Court of Canada.
How long should you keep your tax records?
CRA can review and reassess your income tax returns for the previous three years and, in some cases, even farther back. Generally, it is recommended that people keep their records for at least seven years.
CRA can also arbitrarily assess or guess your income if you have not kept all returns and supporting documentation. Common records to keep include:
- All T-slips
- RRSP contribution slips
- Medical receipts
- Charitable donation receipts
- Self-employed and business revenue and expense records
For assistance in making an objection or appealing a CRA decision, contact an accountant, or a tax lawyer
Canada Revenue Agency: www.cra-arc.gc.ca.
This article covers Ontario and/or federal law. © 2015 Licence and content provided by Legalline.ca