If you’ve received a Notice of Assessment or Reassessment from the Canada
Revenue Agency (CRA), demanding even more money, and you’ve had no luck
sorting out the problem
the conventional way, your next step is to prepare a Notice of Objection. At this point, your
tax file is starting to get serious – and complicated. Here’s a look at the
process involved.
Unincorporated individuals have until April 30 of the second year following
the year in question to file a Notice of Objection (or 90 days after the
date of the Notice of Assessment or Reassessment, if this is later). In
other words, you have until April 30, 2018, to file a Notice of Objection
for 2016 tax returns. For corporations, trusts, or other taxpayers other
than individuals, the filing deadline for a Notice of Objection is 90 days
from the date of the Notice of Assessment. If the matter is not favourably
resolved by the deadline, I suggest that you file a Notice of Objection –
even if you feel you are on the way to resolving the matter.
How to file an objection
A Notice of Objection must be made in writing and must outline your reasons
for objecting to the CRA’s assessment. It must also adequately identify you
(through your Social Insurance Number), and the Assessment (specifying the
taxation year) to which you object. Your Notice of Objection need not be
sent by registered mail; it will be sufficient if the Notice is addressed
to the Chief of Appeals in a Tax Services Office or a Tax Centre of CRA and
delivered or mailed to that office.
It is no longer necessary to file CRA’s Form T400A. Even so, I still
recommend that you use it, rather than simply writing a letter, mainly
because I think that most CRA employees are more “comfortable” dealing with
a form, rather than a letter, which may be perceived as open-ended. The
actual information required on the Notice of Objection form is quite
straightforward: name; SIN; and so on.
Just the facts, please
But the key to your claim is a box area marked “Statement of Facts and
Reasons.” To fight CRA and win, you must base your claim on proper
technical grounds. You should keep your arguments to the point and brief.
You should insert enough facts to support the reasons (that is, the
technical grounds) for your objection. For example, if you are trying to
support a case for interest deductibility, the general rule is that the
borrowing must actually be used for business or investment purposes. So you
should outline the details and use of the loan, particulars of the
investment made with the funds, and so on.
At this stage, you should seriously consider hiring a tax advisor to assist
with your Notice of Objection, especially if there’s a lot of money
involved or there are relatively complicated technical issues. You stand a
much better chance of winning if all the i’s are dotted and t’s are
crossed.
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.
Disclaimer
© 2017 by Fund Library. All rights reserved. Reproduction in whole or in
part by any means without prior written permission is prohibited.
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.
