Have you been audited by the Canada Revenue Agency (“CRA”), or have they issued an Assessment against you without even talking to you!? You are not alone, but you do have options!
The results of an income tax audit are finalized when the Canada Revenue Agency issues a Notice of Reassessment. From the date noted on the reassessment, you will have 90 days to file a Notice of Objection. This signals to the CRA that you disagree with the results and want to dispute the findings. If you miss this 90-day deadline, there is an opportunity to file a request for an extension of time within 12 months from the expiration of this time limit.
Once the Notice of Objection is filed, an appeals officer from the CRA will make contact in approximately 6 to 9 months. If the assessment/reassessment pertains to income tax – all legal and collections actions will be held in a state of suspension. If the assessment/reassessment pertain to trust funds (GST/HST or Source Deductions), we will have to negotiate a nominal repayment plan until the dispute is resolved in order to avoid collections or legal action.
During this interim period, it is crucial that you confer with a tax professional who will represent your interests during this dispute resolution process.
Our role would be to conduct a review of the books and records examined by the Canada Revenue Agency Auditor to identify discrepancies, errors and the incorrect application of the law. Once this examination is complete, a lawyer at Rosen Kirshen Tax Law will prepare written representations, which are founded in law and fact. Once the Appeals Officer makes contact, we would submit our findings for review.
The Appeals Officer may render any of the following decisions:
- Vacate the reassessment, meaning that the Appeals Officer agrees with the taxpayer;
- Vary the reassessment, meaning that the Appeals Officer accepts some of the taxpayer’s arguments and a new reassessment will be issued that reflects this; or
- Confirm the reassessment, meaning that the Appeals Officer rejects the taxpayer’s arguments.
Whether the reassessment is varied or confirmed, you still have the right to further dispute the CRA’s findings by filing an Appeal in the Tax Court of Canada.
The CRA may also issue Notices of Assessment without first auditing a taxpayer, or if you do not respond to their audit questions. These include:
- Net Worth Assessments;
- Notional / Arbitrary Assessments;
- Trust Examinations;
- Third Party Assessments for Directors Liability; and
- Third Party Assessments under Section 160 of the Income Tax Act.
If you disagree with a CRA Assessment or Reassessment, contact a lawyer at Rosen Kirshen Tax Law to discuss your options.
Tax Court of Canada Resources
This posting provides information of a general nature only. It does not provide legal advice nor can it or should it be relied upon. All taxation situations are specific to their facts and will differ from the situations in the articles and postings. If you have specific legal questions you should consult with a lawyer.