What if I Disagree With My Canadian Income Tax Assessment?
How to Dispute Your Canadian Income Tax Assessment
Question: What if I disagree with my Canadian income tax assessment?
If you don't agree with your income tax assessment from the Canada Revenue Agency (CRA), you can file an objection as long as you do it within 90 days from the date of the Notice of Assessment (or reassessment). According to the CRA Annual Report to Parliament, 75,970 Canadians filed income and commodity tax disputes in 2014-2015.
In your Canadian income tax assessment appeal, you will need to explain the reasons for your objection.
You can file your objection by:
- using Form T400A, Objection - Income Tax Act,
- by using the Canada Revenue Agency's online services, My Account or My Business Account,
- or by writing to the Chief of Appeals at the Canada Revenue Agency tax services office or tax centre in your area.
The Canada Revenue Agency will then review your objection and make a decision about your case.
Note that you do not have to pay income tax amounts that are in dispute until the dispute is solved. If you have previously paid amounts towards an assessment and that assessment has been overturned due to an objection, your paid amounts will be partially or completely refunded.
"However, once the objection or appeal is settled, normal interest charges will apply to any tax, interest, or penalties outstanding" (Canada Revenue Agency).
What Is the Objection Process and How Long Does It Take?
Once the CRA has received your notice of objection they will send you a notice of acknowledgement. An Appeals officer will review your case and contact you - this may take several months depending on the current backlog of objections and appeals.
You may wish to meet with the Appeals officer in person to explain your position.
Note that to ensure the process is fair to the taxpayer, the Appeals officer is independent of the CRA auditing departments, and in fact must provide you with copies of the minutes of any discussions with the official(s) that reviewed your return and issued the original assessment. You may request copies of any non-confidential documentation relating to the objection process. You can also request a copy of your entire file under the Privacy Act, which you may need if you disagree with the results of the objection and wish to take the matter to court.
The CRA may request additional information during the process. The result of the objections process will be one of three possible outcomes:
- Your objection is rejected and the full amount owing is due.
- Your objection is accepted in full.
- Your objection is accepted in part.
In the case of options two or three the Canada Revenue Agency will issue a new Notice of Assessment.
What If I Do Not File an Objection Within 90 Days of the Notice of Assessment?
Generally, if you miss the 90 day deadline for submitting an objection you cannot dispute your assessment. However, in exceptional circumstances you can apply to the CRA for an extension of the deadline.
You must apply within one year of the expiration of the 90 day time limit and include the reason(s) why you were unable to submit an objection within the normal time frame.
In order for an extension to be approved you must be able to demonstrate that you intended to submit an objection within the the 90 day limit but were unable to to do so due to "circumstances beyond your control" (as stated on the CRA website), and that you submitted the application for extension as soon as was practicable.
You can apply for an extension by:
- Writing to the Chief of Appeals at your Appeals Intake Centre (see the CRA's list of Appeals Intake Centers), or;
- Using the My Account or My Business Account online services.
What If I Disagree with the Results of an Objection?
If you disagree with the Canada Revenue Agency's decision about your Canadian income tax objection, you can take your assessment appeal to the Tax Court of Canada.
See P148, Your Appeal Rights Under the Income Tax Act for more details on the procedures for assessment appeals.