Tax Disputes & Objections

CRA has extensive tax collection powers. If the tax return filed by a taxpayer contains inaccurate information or if it is filed incorrectly it is highly likely that the taxpayer will be reassessed by the CRA. In order to collect tax or establish tax liability, the first step taken by the CRA is to issue tax assessments. CRA issues tax assessments, net worth assessments, third party assessments for director liability or for assets transferred to a relative when taxes were owing under the Income Tax Act. When such a tax assessment is issued by the CRA, the taxpayer should immediately request an internal review of their file at the CRA by an Appeals Officer to take an independent look at the file. This is only possible by filing a Notice of Objection. Our Toronto income tax lawyers will help you draft a Notice of Objection citing the relevant provisions of the Income Tax Act.

Know how to file a Notice of Objection from our expert Canadian income tax lawyers

After a taxpayer files a Notice of Objection, an Appeals Officer from the CRA will contact the taxpayer or their Canadian income tax lawyer. An independent review of the amounts that are in dispute in the taxpayer’s returns will be conducted by the Appeals Officer.    There is a time limit to file a Notice of Objection. Filing should be done 90 days from the date of the Notice of Assessment or Reassessment, with extension requests possible, but not always granted, for an additional year from the expiration of the 90-day objection period. Our experienced Canadian income tax lawyers can assist at this step by drafting a extension application along with the Notice of Objection. While drafting a Notice of objection our Canadian income tax lawyers not only emphasize on the important points but also explain to the taxpayer why an argument is strong or weak.

The objections raised can be dealt by the Appeals Officer in three ways. The reassessment maybe vacated, varied or confirmed. If the reassessment is vacated it means the Appeals Officer agrees with the taxpayer, if it is varied it means that the Appeals Officer accepts some of the taxpayer’s arguments and a new reassessment will be issued and if it is confirmed it means that the Appeals Officer rejected the taxpayer’s arguments. The taxpayer can appeal to the Tax Court of Canada if he disagrees with the Appeals Officer’s interpretation of the facts but this must be done within 90 days from the date of the reassessment. It must be kept in mind that the CRA is bound by the Income Tax Act and can only act on the authority that is given to it by the Act Income Tax. Thus while drafting a Notice of Objection our Canadian income tax lawyers will make legal arguments and references according to the Income Tax Act, as it is possible that any further appeals will be developed on the basis of the arguments contained within the Notice of Objection.

Ivan from Toronto prepared and filed his own tax return. He made a keying error and claimed a large rental loss in error. CRA denied the loss and issued an income tax assessment for almost $100,000 in taxes owing plus late filing penalties and interest. He retained our firm within the 90 day time window and we immediately filed a Notice of Objection on his behalf. After making submissions to the Revenue Canada appeals officer the entire tax amount, plus penalties and interest, was reversed.

C is a psychologist who teaches at a university in Montreal and also has a private consulting practice. The tax department audited her tax returns and sent her assessments that denied her claims for most expenses for 4 years. One our tax law firm was retained we submitted Notices of Objection for all of the years. We worked with her and her accountant to provide audit evidence of of the expenses claimed and submitted the evidence to the tax department. We also provided a legal analysis to the CRA appeals officer of expenses that he claimed were not deductible, such as conference expenses. She did not have receipts for some of the expenses or a car log for travel expenses, so we agreed with CRA not to allow some of those costs. At the end we reduced most of the taxes owing and related penalties and interest.

FAQ’s

What is a Notice of Objection?

When a taxpayer is notified that the CRA is going to carry out a reassessment of their tax affairs, they can file a notice of objection. Taking this action means that their file will be passed to an Appeals Officer, who will review the situation to make sure that the reassessment is warranted. If you wish to file a notice of objection, contact us. We will help you to draft one that cites the correct provisions of the income act.

What does a tax asssessment mean?

A tax assessment is when the tax authorities have used the information that you have provided and worked out what your tax bill for that year is. In Canada, once that has been done, the CRA issues a Notice of Assessment (NOA). It lists out the amount of tax that has already been paid as well as any tax credits and refunds. If you receive your NOA and do not understand it or believe something is wrong, contact us.

How can a tax lawyer help when in comes to tax disputes?

When it comes to tax disputes, tax lawyers can help in several ways. They can assess the seriousness of the situation. Then explain what steps you need to take to respond properly. As well as assist you in pulling together the information you need. They will also help you to fill out the forms so that you are providing accurate information in the right format. At Rotfleisch and Samulovitch P.C, we provide a full tax dispute service.