Notice of Objection CRA: Navigating the Appeal Process with Canada Revenue Agency

An image of a maze representing navigating the CRA objection and appeal process.

Notice of Objection CRA: Navigating the Appeal Process with Canada Revenue Agency

Sebastien Prost, CPA

When taxpayers in Canada disagree with an assessment or decision made by the Canada Revenue Agency (CRA), they have the right to lodge a formal dispute through a notice of objection. This legal recourse allows individuals and corporations to contest a variety of issues, such as income tax, the Goods and Services Tax/Harmonized Sales Tax (GST/HST), decisions related to the Canada Pension Plan (CPP), or Employment Insurance (EI). The objection acts as the first step in the appeals process, providing a structured path for taxpayers to have their cases reviewed and reassessed by the CRA.

The process of filing an objection is outlined by the CRA, with clear steps to ensure taxpayers understand their rights and the procedures to follow. Taxpayers must adhere to established time limits, providing their objection within 90 days from the date the notice of assessment or decision was mailed to them. In some cases, an extension is possible but conditions apply. The CRA obligates the taxpayer to include specific information with the objection in order to facilitate a comprehensive review of the dispute.

The outcome of an objection can lead to adjustments in the taxpayer’s favor or uphold the original decision, depending on the CRA’s evaluation of the presented arguments and evidence. If the taxpayer remains unsatisfied with the outcome of the objection, there are further avenues for appeal, including the Tax Court of Canada, which represents the next level of dispute resolution.

Understanding the Notice of Objection

When a taxpayer disagrees with a decision made by the Canada Revenue Agency (CRA), they have the right to file a Notice of Objection. This formal document starts the process of reviewing the CRA’s assessment or reassessment.

Purpose and Legal Basis

The purpose of a Notice of Objection is to provide taxpayers with a means to contest the CRA’s assessment or determination regarding their taxes. Legally established under Canada’s Income Tax Act, it triggers a formal and impartial review by the CRA’s Appeals Division or, ultimately, by the courts. The goal is to ensure that taxpayers are assessed and taxed correctly, according to the laws governing Canadian taxation.

Eligibility to File a Notice

To file a Notice of Objection, the individual must be a taxpayer who has received a Notice of Assessment or Reassessment with which they disagree. They may object to the CRA’s calculation of tax, the imposition of penalties, or other determinations made under the Income Tax Act. Both individuals and corporations are entitled to object, provided they do so within the designated time limit specified by the CRA, generally within 90 days from the date the Notice of Assessment or Reassessment was sent.

Preparing to File an Objection

When an individual or corporation decides to contest a decision made by the Canada Revenue Agency (CRA), preparing a Notice of Objection is an essential step. It requires gathering the right documentation, understanding filing deadlines, and knowing what the assessment review process entails.

Required Documentation

To file an objection, one needs:

  • A completed Form T400A, Objection – Income Tax Act, or a signed letter stating the decision they want to review and the relevant facts and reasons. This can be filed through My Account or My Business Account by a taxpayer or their representative.
  • Supporting documents relevant to the objection, such as receipts, books, records, or other pertinent information that substantiate the claim.

Deadlines for Filing

For individuals, the deadline to file a Notice of Objection is one year from the tax return filing due date or 90 days after the date of the Notice of Assessment or Reassessment, whichever is later. The specific dates are as follows:

For corporations, the Notice of Objection must be filed within 90 days of the date on the Notice of Assessment or Reassessment.

Assessment Review Process

Once an objection is filed, the CRA conducts a thorough review which includes:

  • An impartial examination of the assessment or determination under dispute.
  • Consideration of all information available, including any new evidence presented in support of the objection.

During this process, the CRA might request additional information or clarification. It’s imperative for the taxpayer to respond to these requests to avoid delays in the assessment review process.

Submission Process

When filing a Notice of Objection with the Canada Revenue Agency (CRA), a taxpayer has two main methods of submission: digitally through electronic services or via traditional paper-based filing. Each method has specific requirements that must be adhered to in order to ensure a valid submission.

Electronic Submission Methods

Taxpayers can object to a CRA Notice of Assessment or Notice of Reassessment electronically using the CRA’s online services. My Account, My Business Account, and Represent a Client are the primary portals provided by the CRA for individuals, businesses, and tax representatives respectively. To submit electronically, one must:

  • Log in to their respective CRA account.
  • Navigate to the “Submit documents” section.
  • Complete the necessary fields and attach the Notice of Objection form and any supporting documents.

Note: The CRA’s online submission service is available 21 hours a day and is closed daily from 3:00 a.m. to 6:00 a.m. (Eastern Time) for maintenance.

Paper Submission Requirements

For those who choose or need to submit their objection on paper, the CRA requires the following:

  • A completed Form T400A, Objection – Income Tax Act, or a signed letter providing the same information requested on the form.
  • Details of why the assessment or determination is incorrect, including all relevant facts.
  • Any additional documentation or evidence to support the objection.

The paper documents should be sent to the tax center listed on the notice of assessment or reassessment. It’s crucial for the taxpayer to keep copies of all submitted materials for their records.

After Filing an Objection

When a taxpayer files an objection to a notice of assessment from the Canada Revenue Agency (CRA), they embark on a formal review process. The objection sets the stage for the CRA to reconsider its initial assessment.

CRA’s Acknowledgment of Receipt

After an objection is filed, the CRA will acknowledge receipt of the objection. Taxpayers will typically receive confirmation within 30 days. This acknowledgment will often contain information such as the file number associated with the objection and an estimated timeline for when a review will be completed.

Possible Outcomes of an Objection

An objection may result in several potential outcomes:

  • Vacate: The CRA agrees entirely with the taxpayer’s objection and adjusts the assessment accordingly.
  • Vary: The CRA agrees with the taxpayer on some points, leading to a revised assessment.
  • Confirm: The CRA does not find the objection valid and maintains the original notice of assessment.

It’s important for taxpayers to be prepared for any of these scenarios.

Communications with the CRA

Taxpayers can expect communications from the CRA during the review process. It’s critical for them to respond to requests for additional information in a timely manner. Any correspondence from the CRA should reference the file number of the objection. Regular updates on the status of the objection may also be available through the CRA’s online services.

Resolving Disputes

When taxpayers disagree with a notice of assessment from the Canada Revenue Agency (CRA), they have options to resolve the dispute. These range from informal resolutions to formal appeals.

Informal Resolution Options

Taxpayers should first attempt to resolve disputes informally by contacting the CRA directly. This approach allows for clarification or correction without immediately resorting to formal procedures.

  • Contacting CRA: Reach out via phone or written correspondence.
  • Review: A CRA agent will reassess the specific tax issue raised.

Formal Appeals Process

If initial conversations do not resolve the issue, taxpayers may file a Formal Notice of Objection. This initiates the formal appeals process with the CRA.

  1. Filing an Objection: Must be submitted within 90 days of receiving the notice of assessment.
  2. Online Submission: Taxpayers can file objections through the CRA website and immediately receive a case number.
  3. Supporting Documents: Essential to submit relevant documents to substantiate the objection.

The CRA reviews the submitted objection and makes a determination. If the taxpayer disagrees with this decision, they can appeal to the Tax Court of Canada.

Understanding Your Rights

When it comes to resolving tax disputes in Canada, taxpayers are afforded specific rights under the Income Tax Act. Understanding these rights is crucial for any taxpayer faced with an objection to a CRA decision.

Taxpayer Bill of Rights

The Canada Revenue Agency (CRA) adheres to a Taxpayer Bill of Rights that ensures fair treatment and provision of information to taxpayers. Here are some of the key rights related to objections:

  1. Right to Service in the Official Language of Choice: Taxpayers have the option to communicate and receive services in English or French.
  2. Right to Privacy and Confidentiality: Taxpayer information is protected and only shared in accordance with the law.
  3. Right to Formal Review and a Fair and Impartial Appeal Process: If taxpayers disagree with an assessment, they have the right to file an objection and receive an impartial review.

Access to Information

Taxpayers have the right to access their personal information held by the CRA and to verify its accuracy and completeness. This is instrumental when preparing a Notice of Objection as it involves:

  • Review of Assessment Details: Taxpayers can request documentation explaining the CRA’s assessment or reassessment.
  • Clear and Accurate Records: Access to their tax records helps taxpayers provide precise information in their objection.

The CRA is committed to providing accessible services, including alternative formats for information, such as braille or MP3, for individuals with visual impairments.

Record Keeping

When filing a Notice of Objection with the CRA, it is essential to maintain accurate records. A comprehensive approach to document retention and proof of submission ensures that taxpayers are prepared for any inquiries or audits.

Document Retention Policies

Taxpayers should adhere to strict document retention policies. It is advised that all relevant financial records and tax documents be kept for a minimum of six years from the end of the last tax year they relate to. This period aligns with the CRA’s requirement for record keeping.

Key documents include:

  • Notices of Assessment and Reassessment
  • Tax returns filed
  • Supporting documents (receipts, invoices, financial statements, and logs)

Proof of Submission

When a Notice of Objection is filed, obtaining and preserving proof of submission is crucial.

Taxpayers should ensure the following:

  • Online filings: Maintain a copy of the automatic case number received upon submission through CRA’s secure portals (My Account, My Business Account).
  • Mail filings: Keep a record of the mailing details, including date of mailing and the receipt from the postal service, confirming the document was sent.

Taxpayers must document the process meticulously, taking note of submission dates and retaining copies of all correspondence exchanged with the CRA.

Frequently Asked Questions

When dealing with the Canada Revenue Agency (CRA), it’s crucial to understand the rules and procedures for filing a Notice of Objection. This section addresses some commonly asked questions to guide taxpayers through the objection process.

How can I request an extension for filing a Notice of Objection with the CRA?

Taxpayers must typically file a Notice of Objection within 90 days of receiving their Notice of Assessment or Reassessment. To request an extension, one must write to the Chief of Appeals at their CRA tax centre within one year of the filing deadline, explaining the reasons for the delay and request a time extension.

What form should be used to submit a Notice of Objection with the CRA?

A Notice of Objection should be filed using form T400A, Objection – Income Tax Act, or by submitting a detailed letter containing all the necessary information, like personal details and the specific items being disputed.

What are the steps to file a Notice of Objection in Ontario?

In Ontario, if a taxpayer disagrees with the CRA’s assessment, they should first call the phone number on their Notice of Assessment or Reassessment. If unresolved, file a Notice of Objection by completing form T400A or by writing a letter stating they want to object, providing detailed reasons for the objection, and all the relevant facts and documents.

How can I contact the CRA for disputes and objections?

For disputes and objections, taxpayers can contact the CRA by phone via the number on their Notice of Assessment or Reassessment, through the CRA’s online services, by mail, or in person at a local tax services office.

What are the deadlines for submitting a Notice of Objection to the CRA?

The deadline for submitting a Notice of Objection to the CRA is 90 days from the date that the Notice of Assessment or Reassessment was sent. It is important for taxpayers to adhere to these deadlines to retain their rights to dispute the CRA’s findings.

What is the CRA’s service standard for processing objections?

The CRA aims to resolve most objections within a certain timeframe based on the complexity of the case: within 180 days for less complex cases and 365 days for ones that are more complex. Taxpayers can track the status of their objection through the CRA’s online services.

Sebastien Prost, CPA

Written by Sebastien Prost, CPA

Seb Prost, a CPA with over 10 years of experience in taxation and accounting, offers a unique blend of insights from his time at the CRA and his experience in public practice. Originally from QC and now based in Nelson, BC, he specializes in guiding Canadian startups, SaaS companies and other online businesses for all of their accounting and taxation needs.

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