Income tax

 

If you have received a Notice of Assessment, Notice of Reassessment, Notice of Determination, or Notice of Redetermination and you do not think that it is correct or you have additional information for CRA to consider, please review the following Questions to determine the best course of action for you to take.

Question:
Did you overlook an income item or expense when you filed your tax return? Do you have the additional information to submit to the CRA?

Action:
Generally you can ask for a change to a personal tax return (T1) for a tax year ending in any of the 10 previous calendar years. For example, a request made in 2016 must relate to the 2006 or a later tax year to be considered. You will find the steps to follow and processing timeframes here http://www.cra-arc.gc.ca/changereturn/

You can also ask for a change to a corporate tax return (T2). You will find the steps to follow here http://www.cra-arc.gc.ca/tx/bsnss/tpcs/crprtns/ftr/rssssmnt/rqst-eng.html

The Voluntary Disclosures Program gives you a second chance to change a tax return you previously filed or to file a return that you should have filed. You can apply to the Canada Revenue Agency (CRA) to ask for relief of prosecution and penalties. http://www.cra-arc.gc.ca/voluntarydisclosures/

Question:
Did you get an income tax assessment from CRA but you did not file your return? Do you have information for CRA to consider that may change the assessment?

Action:
You can still send your tax return to CRA. Information on how to send us your return can be found here http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/ncm-tx/rtrn/sndng/menu-eng.html.

Question:
Did you submit your receipts and records to CRA and you did not receive the outcome you expected or the issue was not resolved to your satisfaction? This means, that you provided the requested information to CRA and you received your Notice of Assessment, Notice of Reassessment, Notice of Determination, or Notice of Redetermination and you think we have misinterpreted the facts or applied the law incorrectly.
 

Action:
You may have the right to object and submit an objection.  Information about filing an objection can be found below.

Please note that if you received a request to provide information during an audit or were otherwise contacted by CRA with a request to provide additional information and you did not respond to those requests and you chose instead to provide this information as part of an objection, your information may be referred back to the original area for a second review.

Can I file an income tax objection?

You or your authorized representative can file an income tax objection if you have received any of the following:

  • Notice of Assessment;
  • Notice of Reassessment;
  • Notice of Determination; or
  • Notice of Redetermination.

You cannot file an objection to dispute the following:

  • a Statement of Account , or
  • a proposal letter from an auditor.

You are required to clearly explain why you disagree with the assessment or determination and also include all of the relevant facts and reasons.

The time limits for filing an objection are as follows:

If you are an individual:

  • the time limit for filing an objection is whichever of the following two dates is later:
    • one year after the date of the filing deadline for the return (April 30 or June 15), or
    • the day that is 90 days after the day of sending the notice of assessment (the date of the notice or notification).

If you are a business or for assessments of taxes in respect of over-contributions to a registered retirement savings plan (RRSP) or tax-free savings account (TFSA):

  • the time limit to file an objection within 90 days of the day we sent the notice of assessment or reassessment (the date of the notice or notification).

For information about RRSP excess contributions, go to www.cra.gc.ca/rrsp.

For information about TFSA excess contributions, go to www.cra.gc.ca/tfsa.   

What if my objection is past the time limit?

If you did not file your objection on time because you attempted to have your change made by contacting the originating CRA office or because of circumstances beyond your control, you can apply for a time extension to file an objection. You can apply by writing to the Chief of Appeals at your Appeals Intake Centre (see Appendix B of pamphlet P148), or by using the My Account or My Business Account online services. You have to explain why you did not file your objection on time along with the facts and reasons of your objection.

The application for a time extension to file an objection must be made within one year after the expiration of the time limit to file an objection.

How do I file an income tax objection?

Here is what you provide when you file an income tax objection:

  • clear details of the issue(s) you are disputing, for example, I received a reassessment and my expenses were reduced because my receipts were disallowed. I believe that my receipts qualify as proof of my expenses because (insert reasons), and
  • any documentation to support your claim.

You will find the steps to follow to file an objection and processing timeframes below. It is important to always provide all relevant information to CRA to allow for a complete consideration of the issue, at the assessing, audit, and objection stages.

You or your authorized representative can file an objection in one of the following ways:

In all cases, you should clearly explain why you disagree and include all relevant facts, reasons, and supporting documents.

You or your authorized representative can submit supporting documents online at My Account, My Business Account, or Represent a Client, by selecting the “Submit documents” service.

For more information on the Submit Documents online service, go to Submit documents online.

When will an appeals officer look at my objection?

Low complexity objections:

These objections often involve issues such as: individual tax credits, personal deductions, Canada Child Tax Benefit, and Disability Tax Credit. 

Low complexity objections submitted in June 2016 are now being assigned to an appeals officer. 

Medium complexity objections:
These objections often involve issues such as: business expenses and more complex T1 issues. 

Medium complexity objections submitted in January 2016 are now being assigned to an appeals officer.

Scientific Research and Experimental Development (SR&ED) objections:
Due to the consultation with specialists often required to resolve these objections, we cannot provide a timeframe for the resolution of these objections.

High complexity objections:
These objections involve large corporations, complex business transactions, international transfer pricing, and General Anti-Avoidance Rule assessments.  Due to the complex nature of the issues involved, at this time we cannot provide a timeframe for the resolution of these objections.

Tax avoidance schemes

We cannot provide a timeframe for the resolution of these objections. For more information on tax avoidance see http://www.cra-arc.gc.ca/gncy/lrt/vvw-eng.html and http://www.cra-arc.gc.ca/gncy/cmpgns/crckngdwn-eng.html.

How long will my objection take?

The time it takes to complete the review of an objection varies.

Factors that influence the time it takes include:

  • the complexity of the issue, and
  • delays caused by not submitting all the facts, reasons and documentation.

There’s a lot you can do to speed up the processing of your objection.

How can I have my objection resolved faster?

  • ensure that all explanations and documentation are provided as early in the process as possible, and
  • ensure that your concerns are fully explained and supported.

What causes delays during the objection review?

Your objection may take longer if:

  • it is not clear what you are objecting to
  • you do not provide the facts, reasons, and supporting documentation with your objection
  • the appeals officers needs to consult other CRA tax specialists
  • there is an appeal to the courts that may cause your objection to be held in abeyance, pending the outcome

You will be notified if more information is required or your objection is delayed.

What do I do if I don’t agree with the decision made in regards to my objection?

Once you receive CRA's decision resulting from an objection, you can appeal your assessment or determination to the Tax Court of Canada, either under the Informal Procedure or the General Procedure. The time limit for filing an appeal is 90 days from the date on the notice. The Tax Court procedures are explained in publication P148, Resolving Your Dispute: Objections and Appeal Rights under the Income Tax Act. You can appeal the Tax Court's decision to the Federal Court of Appeal, and a judgment of the Federal Court of Appeal can be further challenged before the Supreme Court of Canada, with the Court's permission.

Time Extension – Notice of Appeal

You can apply for an extension to file your appeal by making an application to the Tax Court of Canada. Explain why you cannot or did not file your appeal on time.
Apply as soon as possible, but the application must be made within one year after the expiration of the time limit to file an appeal.

Amounts owing that are under a formal review

In most cases, you do not have to pay income tax amounts that are in dispute until the CRA has completed its formal review or, if you have filed an appeal, until the Tax Court of Canada issues its decision or you withdraw your appeal. In addition, if you file an objection and have previously paid an amount toward an assessment or reassessment, you may ask us to repay the amount you paid that is in dispute. If you are entitled to a repayment, we will first apply the amount to reduce or clear any other amounts you owe that are not in dispute. We will refund the remainder.

It is important to note that interest charges apply during any period that an amount in dispute is not paid/refunded.

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