How to Object to a Notice of Assessment or Reassessment
Every year, many taxpayers are unhappy with the Notices of Assessments they are issued. If you’re in such a position, you do not need to accept the outcome. You may be able to fight your assessment by filing an objection with the Canada Revenue Agency (“CRA”).
What is a Notice of Assessment or Reassessment?
After filing a tax return, taxpayers receive a Notice of Assessment from the CRA. A Notice of Assessment indicates whether you owe the CRA taxes, whether you will get a refund, or whether you have a zero balance. Taxpayers may also receive a Notice of Reassessment. You can expect to receive a Notice of Reassessment if the CRA selects your tax return for an audit, or if the CRA has adjusted your tax return.
If you are selected for an audit, you will receive a letter from the CRA requesting information and documentation they require for the audit. The CRA will then use this information to review your tax return. After the audit is completed, the CRA will either choose to keep the original assessment as is, or reassess the taxpayer. If they choose the latter, the taxpayer will receive a Proposal to Reassess letter requesting further information needed for the Reassessment. This is followed by a Notice of Reassessment, which will indicate the additional tax owed by the taxpayer, and potentially various penalties and interest.
What to do if I Disagree with my Assessment or Reassessment?
Taxpayers may object to a Notice of Assessment or Reassessment. You can do so by writing a letter to the Chief of Appeals at your tax services office, or by filing a T400A Objection.
Your objection should include the following information:
- Your name and address;
- A telephone number where the CRA can reach you during regular business hours;
- The date of your notice of assessment;
- The tax year of the assessment;
- Where you are filing an objection for your personal income tax assessment, your social insurance number;
- Where you are filing an objection for your corporation’s income tax assessment, its business number;
- The reasons for your objection and supporting facts;
- Copies of all documents that support your objection; and
- If you choose to have another person file the objection for you, include the name and address of that person.
While not required, including a copy of your assessment(s) may help speed up the process.
You should try to be as detailed and accurate as possible in your objection. If possible, include supporting documentation, such as receipts and invoices, for every fact you rely on to make your argument.
How do I File an Objection?
You can file an objection in one of three ways:
- By filing online at My Account and selecting “Register my formal dispute”; or
- By filling out Form T400, Objection to Income Tax Act and sending it to the appropriate Appeals Intake Center.
Taxpayers must understand the deadlines that allow the filing of a Notice of Objection. For individuals and testamentary trusts, the deadline is one year from the normal filing due date, or 90 days after the CRA mailed the Notice of Assessment/Reassessment, whichever is later. In all other cases, for example for corporations and inter vivos trusts, the deadline is 90 days after the assessment was mailed. Take note that the deadline is not 90 days after you receive the assessment, so be sure to act quickly and ensure your contact information is up to date with the CRA. You can also create a CRA login and check your assessments online.
Missing the deadline does not necessarily mean that taxpayers lose the opportunity to object to the CRA’s Assessments. If you missed the deadline, you can request an extension from the CRA within one year of the deadline.
The Objection Process
After filing your objection, it will be reviewed by the CRA Appeals Department. If the CRA agrees with your objection wholly or in part, you will be issued a Notice of Reassessment that will indicate your new tax owing. However, if the CRA agrees with the original assessment, you will receive a Notice of Confirmation affirming the original assessment.
If you do not agree with the CRA’s decision, you still have a chance to change the outcome. Under the Income Tax Act, taxpayers have the opportunity to appeal the decision to the Tax Court of Canada within 90 days of the Notice of Reassessment or Notice of Confirmation. Again, the clock starts running from the date the CRA mailed the notice, not the date you received the notice, so pay attention close to the deadline!
The objection process can often be drawn out, frustrating, and downright exhausting. If you would like help with your objection, contact a tax lawyer at Rosen Kirshen Tax Law today!
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.
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