What To Do If Your Disagree With The CRA On Your Tax Return
There are a number of steps you can take if you suspect the CRA has made a mistake in their audit regarding the legitimacy of your tax return. It might be an issue with a personal tax-free savings account (TFSA), a misunderstanding in your GST/HST paperwork, or a consecutive run of business losses for your company. Whatever the issue is, there is legal rout for you to file an appeal.
The first step you must take is to become fully informed about the rules of the Income Tax Act. You must remember that the CRA does not set the law – they follow the Income Tax Act to the best of their ability, and in some cases they get it wrong. It’s your responsibility to hold them accountable if they have made a mistake in your tax audit. You must be informed of the law before you can hold them accountable, of course.
The second step is to seek advice from a tax lawyer or an accountant. Both professionals will be able to offer advice on the legitimacy of your claim, and appropriate next steps. Only a lawyer will be able to take your case to court pursue a resolution. A tax lawyer will be able to represent your case in court and ensure all proper legal procedures are followed. It is up to you and your position whether court is an appropriate step, but you should always wait until your objection has been deliberated on by the CRA.
The third step is to file a notice of objection within 90 days of you receiving the tax return. Perhaps the evidence and rationale you provide is sufficient enough for the CRA to change their position.
At this point you have done all you can to make a formal complaint to the CRA. The final step involves an internal hearing by an Appeals Officer in the CRA that has no familiarity with your case history. This objectivity gives them proper distance to adjudicate the situation. The officer is responsible for deciding whether your case should be vacated, varied, or confirmed. If the Appeals Officer rejects your objection, it is still within your rights to bring the case to the Tax Court of Canada within 90 days of the CRA reassessment.
This article provides information of a general nature only. It does not provide legal advice nor can it or should it be relied upon. All tax situations are specific to their facts and will differ from the situations in this article. If you have specific legal questions you should consult a lawyer.