Missing CRA deadline could derail your assessment appeal

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Congratulations! You’ve filed your 2023 tax return by the April 30 deadline and also you’re awaiting your formal discover of evaluation from the Canada Revenue Agency.

As soon as acquired, take a detailed look to confirm that the CRA has assessed your tax return as you filed it. If not, you will have the formal proper to object and, finally, to your day in court docket. However to be able to defend your proper to object and maybe take your matter to the Tax Court of Canada, you’ll must be sure to file a legitimate and well timed discover of objection by the deadline.

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There are a few methods to file an objection. The best is to file it on-line by logging onto the CRA’s My Account for People and choosing “File my formal dispute.” You’ll be assigned a case quantity that you simply’ll want to incorporate when submitting paperwork, which can be finished on-line.

Alternatively, you possibly can file your objection by mail by printing, finishing and sending Form T400A, Objection – Income Tax Act to the chief of appeals at your Appeals Consumption Centre. For those who don’t wish to use the T400A, you possibly can merely mail the CRA a signed letter that clearly outlines the info and causes to your objection.

The deadline for submitting an objection is one 12 months from the conventional submitting due date, or 90 days after the date printed in your discover of evaluation (NOA), whichever is later. For those who miss the deadline, you possibly can apply to the CRA inside one 12 months of the deadline for an extension. If the CRA denies your software, it’s possible you’ll attraction to the Tax Courtroom.

In recent times, the CRA has added a “Progress Tracker” to My Account, the place you possibly can view the standing of recordsdata that you’ve got submitted to the CRA, together with your objection. It should present the date your objection was acquired after which the date that an preliminary screening was accomplished.

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For instance, I filed an objection on Aug. 9, 2023, for a few of my disallowed 2021 home-office bills. It was screened on Sept. 7, 2023 — not unhealthy — and it was decided that my objection had “a medium stage of complexity.” It went on to say that the CRA’s purpose “is to resolve medium-complexity objections inside 365 calendar days of the date they’re despatched to the CRA” — not nice.

For those who plan to file an objection, make sure you file your objection on time. Being even someday late could be deadly. We had been reminded of this most lately in a tax case determined earlier this 12 months involving a non-public Ontario company that was assessed GST/HST underneath the Excise Tax Act for 9 month-to-month reporting durations between December 2016 and Might 2019. The notices of evaluation had been despatched by the CRA on Nov. 27, 2019.

Beneath the act, the corporate may have filed a discover of objection with the CRA inside 90 days after the day discover of the evaluation was despatched, however it failed to take action. As a substitute, it waited till Feb. 26, 2021, earlier than making use of to the CRA for an extension of time to file an objection. The CRA refused to grant the applying on the idea that it was filed someday past the one-year limitation interval, which is one 12 months following the 90-day deadline. The taxpayer then utilized to the Tax Courtroom to have its extension software granted.

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The taxpayer’s place was that the deadline for submitting its discover of objection would have been Feb. 26, 2020, and that it had filed its deadline extension software on time, on Feb. 26, 2021, which was inside one 12 months of the Feb. 26, 2020, deadline. In response to the taxpayer, it interpreted the 90-day interval to file its discover of objection as having begun on Nov. 28, 2019, that being the day after the date on which the discover of evaluation was despatched.

However the CRA disagreed, asserting that the company’s discover of objection had really been due by Feb. 25, 2020, which was the ninetieth day after the date printed on the NOA (Nov. 27, 2019), with the ensuing extension software due to this fact due by Feb. 25, 2021. Consequently, the company’s extension software was someday late, so the CRA was prohibited from granting the extension software.

The choose reviewed all sides’s place and concluded the company had, sadly, miscalculated its deadlines. If Nov. 28, 2019, was the primary day of the 90-day interval inside which the company was to file its objection, then the ninetieth day afterward, being the deadline by which the objection needed to be filed, would have been Feb. 25, 2020, with the extension deadline one 12 months later, being Feb. 25, 2021.

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The choose, due to this fact, had no selection however to dismiss the taxpayer’s software, so the company was unable to problem the 9 GST/HST assessments because the deadline for objection, in addition to the extension, had handed.

“The perfect time to file a discover of objection is throughout the 90-day interval set out in (the act.) Submitting a discover of objection even someday outdoors that 90-day interval carries vital threat, as a result of the objection is now contingent on the (CRA) granting an extension software,” John Bassindale and Stuart Clark, tax attorneys with Millar Kreklewetz LLP, mentioned in a latest written commentary on the choice.

They famous that “ready till the deadline date to file is a apply that ought to typically be prevented, given the numerous potential failure factors (starting from the technological to the non-public) that might intrude with the method.”

For tax professionals, they advisable sustaining an expert “doomsday system” for diarizing and monitoring related deadlines to make sure deadlines should not inadvertently missed. That is sound recommendation for all of us.

Jamie Golombek, FCPA, FCA, CFP, CLU, TEP, is the managing director, Tax & Property Planning with CIBC Non-public Wealth in Toronto. [email protected].

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