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Appealing a CRA audit decision

If you oppose a decision on your tax return, there are processes in place in which you can appeal a CRA assessment or reassessment.

However, the processes are complicated and it’s usually not a good idea to go it alone. Before you file an objection and start the process you may want to consult with your accountant and/or a tax lawyer.

Under the Income Tax Act of Canada, or ITA, the CRA has the right to assess and reassess taxes. If they find there were discrepancies and that the taxpayer filed late or misrepresented information, they can not only issue a reassessed return, but also fines.

Objection process

The ITA provides taxpayers with a formal objection process if they disagree with their notice of assessment.

Before filing a notice of objection though, you can go to your local CRA office to see if you can settle your issues. If you can’t, then you can go through the formal objection process.

Filing the notice of objection

The notice of objection has to be filed within 90 days of the date that it was sent to you, not when you received it.

Once you have filled out the proper form you can file it at your nearest CRA tax office with the appeals division.

The appeals division will then look at your notice and render a decision. Typically, you will be given the chance to make your case to an appeals officer.

If the officer makes a decision and you don’t agree with, you can appeal to the tax court.

Appeals process

You can appeal to the Tax Court of Canada to have the assessment vacated or reassessed if:

  • You filed a notice of objection; and
  • Did not agree with the decision of appeals division; and
  • You file the appeal to the tax court within 90 days from the date the notice of decision was sent; or
  • Within 180 days from the date you filed the notice of objection, provided CRA did not issue a notice of decision.

The Tax Court of Canada hears appeals in two ways: either through the informal procedure or the general procedure.

Informal procedure

This is a way to hear the matter quickly. Here the court doesn’t have to follow all technical requirements, because it’s an informal process. You can either represent yourself or by a lawyer or agent.

Depositing it or mailing it to the registry of the court files the notice of appeal. The registry will deem the notice filed the day they receive it.

General procedure

This is the formal procedure for an appeal at the tax court level and formal rules and procedures of the court are followed. Individuals can be represented by either themselves or a lawyer but corporations must have legal counsel, though exceptions are infrequently made for officers to represent the corporation.

Federal Court of Appeal

If you still unsatisfied after the tax court has rendered its decision, then you can file an appeal with the Federal Court of Appeal. The appeal has to be filed within 30 days of the date of the tax court’s judgment is communicated (informal process) or 30 days of the date of the tax court’s judgment (formal procedure).

Supreme Court of Canada

If you are also dissatisfied with the decision of the Federal Court of Appeal, then you can request leave to appeal to the Supreme Court of Canada. This has to be filed within 60 days of date of judgement of the Federal Court of Appeal. The Supreme Court can either grant or reject your request for leave.

There are restrictions on appeals, as well as time limits that you should be aware of, because if you miss them your appeal may fall through.

Filing fees apply every time you file an objection or appeal or request for leave.

Though individuals can in most circumstances, represent themselves having a tax lawyer handle the matter for you will insure you have better chances in succeeding in your appeal.

Read more:

CRA Objections and Appeals