Jamie Golombek: Finest to file CRA appeals inside 90 days of the date in your discover of evaluation
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Congratulations! You’ve filed your 2023 tax return by the April 30 deadline and also you’re awaiting your formal discover of evaluation from the Canada Income Company.
As soon as acquired, take an in depth look to confirm that the CRA has assessed your tax return as you filed it. If not, you will have the formal proper to object and, finally, to your day in court docket. However so as to defend your proper to object and maybe take your matter to the Tax Court docket of Canada, you’ll have to ensure you file a sound and well timed discover of objection by the deadline.
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There are a few methods to file an objection. The simplest is to file it on-line by logging onto the CRA’s My Account for People and deciding on “File my formal dispute.” You’ll be assigned a case quantity that you just’ll want to incorporate when submitting paperwork, which may also be finished on-line.
Alternatively, you may file your objection by mail by printing, finishing and sending Kind T400A, Objection – Revenue Tax Act to the chief of appeals at your Appeals Consumption Centre. If you happen to don’t wish to use the T400A, you may merely mail the CRA a signed letter that clearly outlines the information and causes to your objection.
The deadline for submitting an objection is one 12 months from the conventional submitting due date, or 90 days after the date printed in your discover of evaluation (NOA), whichever is later. If you happen to miss the deadline, you may apply to the CRA inside one 12 months of the deadline for an extension. If the CRA denies your utility, you could attraction to the Tax Court docket.
In recent times, the CRA has added a “Progress Tracker” to My Account, the place you may view the standing of information that you’ve got submitted to the CRA, together with your objection. It’s going to present the date your objection was acquired after which the date that an preliminary screening was accomplished.
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For instance, I filed an objection on Aug. 9, 2023, for a few of my disallowed 2021 home-office bills. It was screened on Sept. 7, 2023 — not dangerous — and it was decided that my objection had “a medium stage of complexity.” It went on to say that the CRA’s purpose “is to resolve medium-complexity objections inside 365 calendar days of the date they’re despatched to the CRA” — not nice.
If you happen to plan to file an objection, you’ll want to file your objection on time. Being even in the future late could be deadly. We had been reminded of this most lately in a tax case determined earlier this 12 months involving a personal Ontario company that was assessed GST/HST beneath the Excise Tax Act for 9 month-to-month reporting intervals between December 2016 and Could 2019. The notices of evaluation had been despatched by the CRA on Nov. 27, 2019.
Beneath the act, the corporate might have filed a discover of objection with the CRA inside 90 days after the day discover of the evaluation was despatched, but it surely failed to take action. As a substitute, it waited till Feb. 26, 2021, earlier than making use of to the CRA for an extension of time to file an objection. The CRA refused to grant the applying on the premise that it was filed in the future past the one-year limitation interval, which is one 12 months following the 90-day deadline. The taxpayer then utilized to the Tax Court docket to have its extension utility granted.
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The taxpayer’s place was that the deadline for submitting its discover of objection would have been Feb. 26, 2020, and that it had filed its deadline extension utility on time, on Feb. 26, 2021, which was inside one 12 months of the Feb. 26, 2020, deadline. In keeping with the taxpayer, it interpreted the 90-day interval to file its discover of objection as having begun on Nov. 28, 2019, that being the day after the date on which the discover of evaluation was despatched.
However the CRA disagreed, asserting that the company’s discover of objection had really been due by Feb. 25, 2020, which was the ninetieth day after the date printed on the NOA (Nov. 27, 2019), with the ensuing extension utility subsequently due by Feb. 25, 2021. Consequently, the company’s extension utility was in the future late, so the CRA was prohibited from granting the extension utility.
The choose reviewed both sides’s place and concluded the company had, sadly, miscalculated its deadlines. If Nov. 28, 2019, was the primary day of the 90-day interval inside which the company was to file its objection, then the ninetieth day afterward, being the deadline by which the objection needed to be filed, would have been Feb. 25, 2020, with the extension deadline one 12 months later, being Feb. 25, 2021.
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The choose, subsequently, had no selection however to dismiss the taxpayer’s utility, so the company was unable to problem the 9 GST/HST assessments because the deadline for objection, in addition to the extension, had handed.
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“The most effective time to file a discover of objection is throughout the 90-day interval set out in (the act.) Submitting a discover of objection even in the future outdoors that 90-day interval carries important danger, as a result of the objection is now contingent on the (CRA) granting an extension utility,” John Bassindale and Stuart Clark, tax legal professionals with Millar Kreklewetz LLP, stated in a latest written commentary on the choice.
They famous that “ready till the deadline date to file is a apply that ought to usually be averted, given the numerous potential failure factors (starting from the technological to the private) that might intervene with the method.”
For tax professionals, they advisable sustaining an expert “doomsday system” for diarizing and monitoring related deadlines to make sure deadlines usually are not inadvertently missed. That is sound recommendation for all of us.
Jamie Golombek, FCPA, FCA, CFP, CLU, TEP, is the managing director, Tax & Property Planning with CIBC Personal Wealth in Toronto. Jamie.Golombek@cibc.com.
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