Area of Law: Tax Law
Answer Number: 201
Appealing a CRA audit decisionRegion: Ontario Answer Number: 201
If you disagree with an assessment or reassessment of your tax return by Canada Revenue Agency (CRA), and you want to appeal, you should consult a lawyer. In simple cases, you may be able to make an appeal on your own, although you may still want to consult a lawyer for advice.
If you disagree with an assessment or reassessment, you can first contact the General Inquiries line of CRA to discuss the matter with a representative.
If the matter is not resolved, you can formally object to the assessment or reassessment. You have a number of options for how to file an objection:
- Online submission, if you have an individual account or a business account registered online with CRA, select the option for Registering a Formal Dispute;
- Writing to the Chief of Appeals at the Appeals Intake Centre (in either Surrey, BC or Sudbury, ON); or
- Using Form T400A, Objection – Income Tax Act available from Canada Revenue Agency.
In all cases, you have to explain why you object to CRA’s assessment and include all relevant facts and documents.
Objections must be received within 90 days from the date the Notice of Assessment or Reassessment was written. However, individual taxpayers may be able to file an objection within one year of filing a return even if the 90 day period has passed. You should call CRA to determine your deadline for appealing.
Once your objection has been received, an independent review will take place and you will usually be able to present information about your objection to an Appeals Officer who will make a decision. CRA will send you its decision by way of a notice of assessment, or a notice of confirmation. If you do not agree with CRA’s decision, you can make an appeal to the Tax Court of Canada.
Appealing to the Tax Court of Canada
Your appeal to the Tax Court of Canada must be made within 90 days from the date of the notice of assessment or notice of confirmation.
There are two ways to make an appeal to the Tax Court: an Informal Procedure and a General Procedure. The type of procedure you use will depend on the amount of money in dispute.
1. Informal Procedure
If you choose the Informal Procedure, you do not require a lawyer, although some people are represented by other professionals, such as accountants. This method is faster and less formal than the General Procedure.
You qualify to use the Informal Procedure if:
- the disputed amount of federal tax and penalties is not more than $25,000 per assessment;
- the disputed loss amount is not more than $50,000 per determination; or
- interest on federal tax and on penalties is the only matter in dispute.
It is important to note, however, that if the amount in question is close to the Informal Procedure limits, you may still use this procedure by simply restricting your claim to those limits. If you do this, you will have to state this fact in your appeal. There is no filing fee to file an appeal under the Informal Procedure. Also, you do not need to file a specified form. You will need to put your appeal in writing, usually in a letter. The letter should include your contact information, the fact that you are requesting your appeal to be heard under the Informal Procedure, the reasons for your appeal, and the relevant facts.
Appeals from a decision made under the Informal Procedure can, under certain circumstances, be made to the Federal Court of Appeal. Grounds for such appeals, however, are restricted by section 27 of the Federal Courts Act.
2. General Procedure
The General Procedure is a formal trial before a judge. The Tax Court of Canada will hear your appeal under the General Procedure regardless of the disputed amount, except when you qualify for and choose the use the Informal Procedure.
The General Procedure follows formal court rules, and covers matters such as:
- filing of an appeal;
- rules of evidence;
- examinations for discovery; and
- production of documents.
There is a filing fee when appealing using the General Procedure, which is based on the amount of tax or penalty being disputed. The fee ranges from $250 to $550. Also, there are formal documents that must be filled out to make an appeal through the General Procedure.
Most people who go through the General Procedure are represented by a tax lawyer. Decisions made in a General Procedure may be appealed to the Federal Court of Appeal and a further appeal can be made to the Supreme Court of Canada. You must file your appeal within 30 days of the Tax Court’s decision (the months of July and August are not included when calculating the 30 day time-limit).
How long should you keep your tax records?
CRA can review and reassess your income tax returns for the previous four years. Also, in some cases, such as cases of suspected fraud or misrepresentation, CRA can go farther back and there is no time-limit for the re-assessment. Generally, it is recommended that people keep their records for at least six or seven years.
CRA can also arbitrarily assess or guess your income if you have not kept all returns and supporting documentation. Common records to keep include:
- All T-slips
- RRSP contribution slips
- Medical receipts
- Charitable donation receipts
- Self-employed and business revenue and expense records
For general information, contact Canada Revenue Agency.
For help filing your tax returns, contact H&R Block.
For legal advice and assistance with a CRA tax dispute, or other tax issues, contact our preferred Tax lawyers and see who’s right for you:
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