Jamie Golombek: Greatest 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 obtained, take an in depth look to confirm that the CRA has assessed your tax return as you filed it. If not, you have got the formal proper to object and, in the end, to your day in court docket. However as a way 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 choosing “File my formal dispute.” You’ll be assigned a case quantity that you simply’ll want to incorporate when submitting paperwork, which will also be finished on-line.
Alternatively, you may file your objection by mail by printing, finishing and sending Kind T400A, Objection – Earnings Tax Act to the chief of appeals at your Appeals Consumption Centre. For those who don’t need to use the T400A, you may merely mail the CRA a signed letter that clearly outlines the details and causes on your objection.
The deadline for submitting an objection is one 12 months from the traditional submitting due date, or 90 days after the date printed in your discover of evaluation (NOA), whichever is later. For those who 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 submitted to the CRA, together with your objection. It should present the date your objection was obtained 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.
For those who plan to file an objection, make sure to file your objection on time. Being even sooner or later late will be deadly. We had been reminded of this most just lately in a tax case determined earlier this 12 months involving a non-public Ontario company that was assessed GST/HST beneath the Excise Tax Act for 9 month-to-month reporting durations between December 2016 and Could 2019. The notices of evaluation had been despatched by the CRA on Nov. 27, 2019.
Underneath 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, nevertheless it failed to take action. As an alternative, 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 appliance on the premise that it was filed sooner or later 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 line 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 truly 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. In consequence, the company’s extension utility was sooner or later late, so the CRA was prohibited from granting the extension utility.
The choose reviewed either side’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 alternative 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.
Really useful from Editorial
“The most effective time to file a discover of objection is inside the 90-day interval set out in (the act.) Submitting a discover of objection even sooner or later outdoors that 90-day interval carries important threat, as a result of the objection is now contingent on the (CRA) granting an extension utility,” John Bassindale and Stuart Clark, tax attorneys with Millar Kreklewetz LLP, mentioned in a current written commentary on the choice.
They famous that “ready till the deadline date to file is a follow that ought to typically be prevented, given the numerous potential failure factors (starting from the technological to the private) that would intrude with the method.”
For tax professionals, they really useful sustaining knowledgeable “doomsday system” for diarizing and monitoring related deadlines to make sure deadlines will not be 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 Non-public Wealth in Toronto. Jamie.Golombek@cibc.com.
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