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Disagree with the Canada Revenue Agency’s Notice of
Assessment? You don’t have to accept it lying down. You CAN
fight their decision by filing a Notice of Objection. Although we
recommend that you
consult with a tax lawyer
before doing so, you
can technically object without the help of a tax expert.

Here is how to fight an incorrect CRA tax assessment in 3
Steps:

STEP 1: Make sure you meet the conditions to file the CRA’s
Notice of Objection

To formally object, you need to have received one of the
following notices:

  1. Notice of Assessment

  2. Notice of Reassessment

  3. Notice of Determination

  4. Notice of Redetermination

This includes notices you may have received with regards to tax
credits or benefits such as the Canada Child Benefit or GST/HST tax
credit.

If your business is declaring a loss, you can file an objection
only AFTER you have received a Notice of Loss Determination. You
can request this by contacting your local tax centre or tax
services office.

Also, you must not have passed the deadline established by the
CRA to file the Notice of Objection. For most individuals, the
deadline is the later date of one of the following:

  1. 90 days from the date listed on your
    CRA Notice of Assessment or Notice of Determination.

  2. or

  3. One year after the deadline
    for the filing the tax return

For corporations, the deadline to file an objection is 90 days
from the date listed on the Notice of Assessment or Notice of
Determination. The same rule applies for objections dealing with
contributions to a registered retirement savings plans (RRSP) or a
tax-free savings account (TFSA).

If you missed the deadline, you have the option to apply for an
extension. Here, you will explain why you could not file your
Notice of Objection on time. Was it due to delays by the Canada
Revenue Agency? Were there extraordinary circumstances beyond your
control, such as a natural disaster or illness? Provide whatever
proof you have to support your explanation.

This option is only available up to one year after the initial
objection deadline date. You can apply for an extension at the same
time that you file your Notice of Objection.

STEP 2: Determine what kind of objection you need to file with
the Canada Revenue Agency

There are nine:

  1. Income Tax Objection (T400A Notice of Objection Form)

  2. GST/HST Objection (GST159 Notice of Objection Form)

  3. Canada Pension Plan (CPP) or
    Employment Insurance (EI) Appeal (CPT101 Form)

  4. Ontario Corporations Tax Objection
    (ON100 Notice of Objection Form)

  5. Scientific Research and Experimental
    Development (SR&ED) Objection

  6. Excise Taxes and Special Levies
    Objection (in most cases, Form E413, Notice of Objection [Excise Tax
    Act], or Form E414, Notice of Objection
    [Purchaser])

  7. Selected Listed Financial
    Institutions (SLFI) Objection (GST159 Notice of Objection Form)

  8. Registered Charities, Registered
    Canadian Amateur Athletic Associations (RCAAAs), and other Listed
    Qualified Donees Objection

  9. Registered Savings Plan
    Objection

STEP 3: File your objection either online, by mail, in person
or via a representative (such as a tax lawyer or accountant)

When describing the reasons for your objection, make sure you
include all of the relevant information and documents to support
your case. If you don’t, the CRA may request this missing
information which will delay the resolution of your tax
problem.

Filing an objection online: Click on
“Register my Formal Dispute” from within the tax portal
and then select either “My Account for Individuals” or
“My Business Account”

Filing an objection by mail or in person: In
most cases, you will fill out Form T400A, “Objection – Income Tax
Act” and mail or deliver it to the Chief of Appeals at your
Appeals Intake Centre. See Step 2 for a list of forms for different
tax objections. You can include a letter clearly explaining why you
are objecting to the initial CRA tax assessment – along with
any other supporting documents.

Filing an objection via a representative: Your
tax lawyer or accountant will have you sign an authorization form.
For individuals, it is Form T1013, and for businesses and non-profit
organisations, it is Form RC59.

IMPORTANT CONSIDERATIONS WHEN FILING THE CRA TAX OBJECTION

Typically, you do not have to pay the amount in dispute while
the Canada Revenue Agency is evaluating your Notice of Objection
– UNLESS it relates to one of the following situations:

  1. GST/HST and payroll taxes
    that you collect on behalf of the government:
    In this
    case, you should remit the entire disputed amount to the Canada
    Revenue Agency. They will NOT postpone collection action while you
    are going through the CRA objection process

  2. Charitable donation tax
    credit under a tax shelter:
    Here, you will need to submit
    at least half of the amount under dispute

  3. Large corporations:
    In this situation, you need to pay at least half of the disputed
    amount

While the Canada Revenue Agency is evaluating your Notice of
Objection, applicable interest charges for any balance due will be
accruing. Some taxpayers choose to pay the entire amount under
dispute to avoid paying interest if they are unsuccessful with
their CRA tax objection.

If you decide to go this route, and you have not received a
decision within 120 days of your application, you can request a
refund for the amount in dispute – in most cases. The
exception is if the payment had to do with a charitable donation
tax credit or the taxpayer is a large corporation. In this case,
you can obtain a refund for half of the amount in dispute.

Upon filing your Notice of Objection, a CRA representative will
review all of the information you submitted and determine whether a
readjustment is warranted. If you are partially or entirely
successful, the CRA will send you a Notice of Reassessment or
Notice of Redetermination detailing how they will be readjusting
the taxes owed. If you are unsuccessful, the CRA will communicate
this to you in writing and you will, therefore, be responsible for
paying the amount due. This tax debt will now include interest IF
you had chosen not to pay the disputed amount while undergoing the
CRA objection process. Typically, CRA collection actions will
commence 90 days after they have made this determination.

You do, however, have the option to continue fighting the
decision by filing an appeal to the Tax Court of Canada. Although
we recommend
seeking legal counsel
, a tax lawyer is not
technically required in most cases to appeal the CRA’s
decision. If a corporation or charity is filing the tax appeal,
then a tax lawyer is required.

The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.

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