If your Notice of Assessment is unfavourable, the first thing you must do
is find out why the CRA has disallowed a claim or otherwise increased your
taxes payable. If there’s a difference between your figures and the CRA’s,
it’s quite possible that no one has even looked at your return beyond a
data entry clerk if you filed a paper return, or what’s more likely these
days, only CRA’s computer itself if you e-filed. You have a legal right to
appeal your case and, more importantly, if you do this properly, you stand
a very good chance of winning.
Does the “Explanation” really explain anything?
The first place to look is on Page 1 of your Notice, which is captioned
“Explanation of changes and other important information.” In the vast
majority of cases, this explanation is computer-generated – and much of the
“explanation” you find on the page may actually have nothing much to do
with the discrepancy.
In fact, at this stage, the vast majority of problems relate to some type
of data entry error. If your return has not been prepared using a tax
preparation program, you may have made an error in calculation or entry, or
perhaps a CRA clerk has simply keyed in the wrong number. In other cases,
there may be problems with the application of installment remittances
(e.g., they’ve applied it to the wrong year or, worse still, to a different
taxpayer). Other discrepancies: There may be a late filing penalty even
though you filed on time, or a manual check of your return did not reveal a
When reading the Explanation of Changes, look for something that doesn’t
ring a bell, especially if there are numbers shown in the particular
If, after reading the Explanation of Changes, you still don’t know what’s
going on, then take a look at the “Summary” calculations contained in the
Notice. On the left-hand side of the page, you will see key “boxes” (data
fields) in your tax return, with CRA’s calculations on the right-hand side
of the page. Compare these to your return on a line-by-line basis, and you
should be able to zero in on where the discrepancy is.
Contacting the CRA
If you’re still all at sea, one option is to call the folks at your Tax
Services Office and ask them (of course, another option is to go to an
accountant). The Notice of Assessment itself provides a phone number to
request an “explanation” – even though the Notice itself purports to give
Don’t assume that when you get through to a tax auditor on the line, you
are dealing with an expert on the matter in question. This simply isn’t the
case. In many cases, the CRA employees who staff the information lines may
not have particular expertise in your problem. They will certainly not be
familiar with your particular tax return.
Once you understand the problem and you think that you’re in the right,
your next step is to contact the CRA itself. You may do this in writing by
sending your enquiry to the Tax Centre to which you sent your return to the
attention of the Enquiries and Adjustments Division at the address on the
front of the Notice. Requests by telephone or personal visits should be
directed to the Tax Services Office that serves your area. The Notice of
Assessment itself indicates that if the problem can’t be resolved, you can
contact the tax office’s “Problem Resolution Program.” The phone number is
listed in the government pages – there is a separate listing under the name
of each tax services office.
If the matter is straightforward and in your favour, so that it could be
resolved on the spot, a visit to the Tax Services Office may be a good way
to go. You should have your Notice of Assessment and your copy of your
return with you (be sure to take every page of your return with you,
including all schedules). The CRA official will pull up your return, key in
the adjustment, and you’re finished. That sure beats waiting for weeks for
CRA to respond to a letter. However, if the matter is more complicated, a
letter may be a better way to go.
Although some people go straight to a Notice of Objection (more on this
procedure next time), contacting the Enquiries and Adjustments section will
give you an extra kick at CRA, just in case there’s a problem. Note: The
collection procedures should stop if a Notice of Objection is filed on a
timely basis. However, interest will continue to run on the outstanding
What to put in your letter
When contacting the CRA, I suggest the following:
* If you write a letter, place the following prominently at the top of the
letter: Re: [your name]; [Social Insurance Number] – 2016 Notice of
Assessment. In most cases, you should state that there has been an
incorrect assessment. Give the line number, the previous amount, the amount
of the adjustment and the revised amount. Don’t forget to include your
phone number and name and address.
* Provide any reasons or details and whatever backup documentation may be
relevant, even if you have already included it with your tax return. What
you want to do is give the CRA adjuster a “self-contained package” so that
he or she can zero in on the problem.
In general, you should keep your correspondence with CRA factual and to the
point. CRA’s interest is in resolving the dispute as quickly as possible.
They don’t want to hear your life story, or what you think of the
government and our tax system. CRA will, as a matter of standard procedure,
reassess returns if the adjustment relates to an error in arithmetic or a
misunderstanding of the facts. If your dispute is based upon a different
interpretation of the law, you have to file a Notice of Objection.
In many cases, your letter to CRA may be sufficient to clear up the matter
in your favour. But if it becomes necessary to actually talk to a CRA
auditor, always be courteous and to the point. I am convinced that a great
many serious disputes with CRA arise because of personality conflicts, that
is, where someone raises the ire of a CRA auditor. Getting along well with
CRA goes a long way towards success.
How to file a Notice of Objection.
Samantha Prasad, LL.B., is a Partner with Toronto law firm
Minden Gross LLP, a Meritas Law Firm Worldwide affiliate, and specializes in corporate,
estate, and international tax planning. She writes frequently on tax
issues, and is the co-editor of various
Wolters Kluwer Ltd. tax publications. Portions of this article first appeared in The TaxLetter, © 2017 by
MPL Communications Ltd. Us
ed with permission.
© 2017 by Fund Library. All rights reserved. Reproduction in whole or in
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The foregoing is for general information purposes only and is the opinion
of the writer. This information is not intended to provide specific
personalized advice including, without limitation, investment, financial,
legal, accounting or tax advice.