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How to object to a CRA Notice of Assessment
7/24/2017 12:48:16 PM
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TAX PLANNING
Tax-saving tips and strategies from a leading Canadian tax-planning expert.



By Samantha Prasad  | Tuesday, June 20, 2017


 



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.

 
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