Taxpayer’s who do not agree with their notice of assessments or reassessments can file a notice of objection, appealing the Minister’s decision. Generally, one would first to go the appeals division as opposed immediately to Tax Court. Sometimes we file a T1 adjustment form where the Ministers’ adjustments are simply based on incorrect information. However, where there is a misinterpretation of the facts or it is a grey area, the appeals process is the best route. The appeal process also stops the tax collection process but still with arrears interest accruing on the account until the matter is resolved.
It is very important to file the notice of objection (CRA Form 400A) on a timely basis. You need to be cognizant of the dates imprinted on the notices of assessment or reassessment.
For individuals, the due date for filing a notice of objection under subsection 165(1) of the Income Tax Act (“ITA”) is the later of (i) the day that is one year after the filing due date of the return for the year in which the objection relates to, and, (ii) the day that is 90 days after the date of the notice of (re)assessment. You may appeal to Tax Court under section 169 of the ITA if you are unsuccessful with the objection, but you have 90 days to do so.
A late-filed notice of objection may be filed within one year after the otherwise due date under subsection 165(1) of the ITA if the taxpayer, pursuant to section 166.1 of the ITA if the taxpayer, (i) can demonstrate to the Minister that he was unable to act, or instruct another to act in the taxpayer’s name, or (ii) had a bona fide intention to object to the assessment, and, give reasons that it would be just and equitable to grant the application, and the application was made as soon as circumstances permitted. Most applications are generally accepted; however, the facts and circumstances will determine if they are. There have been court cases confirming the rejection of a late-filed objection.
Under section 166.2, the taxpayer may appeal to Tax Court within 90 days of receiving a rejection from the Minister on a section 166.1 application, or after 90 days of not receiving a reply from the Minister on section 166.1 application.