Notice of Objection Procedures and Deadlines

Do you think the Canada Revenue Agency (CRA) treats you fairly? No? Well according to the CRA, all taxpayers are entitled to fair treatment. In fact, this right to fair treatment is enshrined in the “TaxpayerBill of Rights”.  

One of the best things you can do if you feel that you aren’t being treated fairly is to file a Notice of Objection (NOO). 

Why should I file a Notice of Objection? If you don’t understand or agree with your income tax or GST/HST assessment, this is your best opportunity to formally dispute the CRA’s position and make your voice heard.

When should I file a Notice of Objection? The deadline to file an objection is the later of the following:

                     i.        One year after the date of the return’s filing deadline

                    ii.        90 days after the day the notice of (re)assessment

Are you late?  Don’t lose hope if you are beyond these deadlines. The CRA may grant you an extension to file your Objection under certain conditions:

• the application is being made within one year after the expiration of the time limit for objecting;
• the person demonstrates that, within the time limit for objecting, the person was unable to act or to have someone else act in the person's name, or the person had a bona fide intention to object;
• the person demonstrates that, given the reasons set out in the application and the circumstances of the case, it is just and equitable to grant the application; and
• the person demonstrates that the application was made as soon as circumstances permitted it to be made.

Who can file a Notice of Objection? You may file the Objection yourself or you may hire a tax professional to do it on your behalf. 

How can I file the Notice of Objection? A Notice of Objection can be submitted online, filled out in hard copy and mailed or faxed to the Chief of Appeals.  While there is a specific form called the T400A, you can simply write a letter objecting to your assessment as well.

What happens after I file my Notice of Objection? The CRA will send you a letter acknowledging receipt of your objection and will advise you that someone called an “Appeals officer” will be contacting you as soon as possible (currently the wait is around 6 to 9 months). Once you are contacted, you begin the process of resolving your dispute with the Appeals officer by exchanging facts, reasons and arguments. The Appeals officer will then review your position and determine the correct assessing position. You are then notified of the decision in writing by the Appeals officer.

When properly written and presented, filing a Notice of Objection is a powerful tool when you want to ensure your fair treatment by the CRA.  If you want to protect your rights and be treated fairly by filing a NOO, call Tax Solutions Canada today at 1-888-868-1400.

Dispute with CRA? To Object or Not Object – That is the Question

So you’ve been audited by the Canada Revenue Agency (CRA) and received a reassessment on your income tax and/or GST/HST returns. You may have even been hit with gross negligence penalties. What do you do? How do you fight the reassessment? Is there any hope?  Yes! You can protect your rights and file a Notice of Objection to settle your dispute with CRA.

A Notice of Objection is a formal dispute resolution process which allows you to make your case that the CRA auditor was wrong regarding your tax situation. The Notice of Objection is your best shot at telling your side of the story and getting some or all of the auditor’s adjustments reversed. 

It is important to point out that the Notice of Objection is not a court-based process and you do not need a lawyer to represent you. However, this doesn’t mean you should go it alone – far from it!  You absolutely should hire a tax specialist who knows how to best present your case in order to give you the greatest chance of a successful outcome.  

Here are some key points to keep in mind about the Notice of Objection:

-       Act quickly!  In most cases, you only have 90 days from the date of the reassessment to file your Notice of Objection.

-       What if I didn’t file within 90 days?  Don’t lose hope!  You have 1 year after the 90^th day to request an extension of time to file your Notice of Objection. Your chances of getting your request granted is better the earlier you make it.

-       What about CRA collections? (Part I) If you are objecting to an income tax issue, the good news is that the objection protects you from the CRA collector.  However, as long as the debt remains unpaid - even while it is under objection - interest will continue to build.

-       What about CRA collections? (Part II) However, unlike an income tax assessment, if you are objecting to an excise tax issue (i.e. GST/HST), the CRA collector will still want their money while you wait to have your objection resolved. 

Let’s say you have been assessed a gross negligence penalty and want to have it removed. Some may ask if they should file a taxpayer relief application instead of a Notice of Objection.  While the Taxpayer Relief Program does review requests to remove penalties, a Notice of Objection would be a much better choice. Why? A Notice of Objection is a formalized process in which the CRA must reverse the auditor’s position if your case is proven to be superior to that of the auditor.  A taxpayer relief application is at the sole discretion of the employee reviewing your file. In the case of a gross negligence penalty, your chances of success are slim as you would have to prove “exceptional circumstances.”  Also, filing a Notice of Objection stops collection action (see below) while a relief application does not.

I often get asked if filing a Notice of Objection is really worth the effort. I can answer that question with a resounding “YES”!  A properly filed and represented Notice of Objection gives you an excellent chance to successfully resolve your dispute with CRA. 

Don’t turn to just anyone to solve your tax problem.  Call Tax Solutions Canada today for expert advice from their ex-CRA and tax specialists: 1-888-868-1400.

Can I Object to a Tax Assessment Based on the Tax Return I Filed Myself?

The idea of objecting to CRA’s Tax Assessment based on the return that you filed yourself sounds strange doesn’t it? You provided the information, so then why would you have a reason to object to the return?

When you file your return, CRA may have some other information on their file that leads them to believe you had more income or perhaps they determine that you were not entitled to some expenses or credits that you claimed. This causes CRA to assess you for more tax owing than what you filed. Often CRA assesses your return based simply on what you file, but they may revisit your return later and re-assess you.  Such an increased assessment can lead to penalties and interest, which can be significant. In the event that CRA determines you are a repeat offender and negligent in some way they can assess gross negligence penalties of up to 50% of the tax debt you owe!

If you are filing a return late you will be assessed penalties based on how many times you have filed late in previous years. For example, if you filed ONLY your 2012 tax return late, you will be assessed a penalty for late filing equal to 5% of the amount of the tax and then 1% per month thereafter, for up to 12 months. Now, say you filed your 2009, 2010 and 2011 tax returns late as well, the penalty would then be increased to 10% of the amount of the tax debt and then 2% per month for up to 20 months. CRA is unforgiving when it comes to these penalties, even if you have a legitimate reason for filing your returns late.

Returns filed late are often subject to more scrutiny by CRA.

While CRA’s website indicates that you can apply to have penalties cancelled through a Taxpayer Relief application, it can be more effective to leverage a Notice of Objection to object to penalties or the increased tax itself as assessed on your return.  Choosing the Notice of Objection route does not block you from Taxpayer Relief.

Filing an Objection is very time sensitive. An Objection must be filed within 90 days of the re-assessment. If you have a good explanation that will meet CRA’s high standards, you may be able to extend this time frame for up to an additional year. When you file an Objection, if CRA rejects it you then have three choices: 

·        Go to tax court and ask a judge to make a final determination

·        Make an application for Taxpayer Relief

·        Pay the taxes plus interest plus penalties – even if they are unfair

Going to court is the most costly of the three options. Nothing that CRA puts onto the re-assessment is necessarily the final answer or correct and you have a great deal to gain by fighting their arbitrary assessments of penalties and interpretation of what is income, what may be deducted legitimately and what credits you are allowed to claim. With that said, the Objection and Taxpayer Relief programs are both official programs with bureaucratic processes. You will be best served working through a professional to make applications under these programs so as to optimize your chance of being successful. This will also ensure that throughout the process you don’t give CRA any further information that could lead to more problems for you later in the event that your applications are rejected and they commence collection action against you. 

For more information about filing an Objection or a Taxpayer Relief application please visit www.taxsolutionscanada.com or call 1-888-868-1400.

Charity Tax Scheme Objection 101 - What You Can Do if an Objection Has Been Held in Abeyance Forever

In recent years those who have participated in “creative” charity schemes (whether they realized it or not) have come under major scrutiny by CRA. 

CRA has been systematically auditing and re-assessing taxpayers in this regard over the past 8-10 years and penalties under these circumstances are severe. If CRA audits and/or re-assesses you as having been involved in a charity scheme they can assess gross negligence penalties of up to 50% of the amount of the tax debt that they allege that you owe. 

Because these charity schemes were rampant in the early 2000s, thousands of Canadians have found themselves in this position and have filed an Objection with CRA with respect to their new tax debts and the gross negligence penalties that have been assessed. Some of these Notices of Objection have been rejected and have made it all the way up to the Supreme Court. 

Because there are so many related cases where there is a case that is in the court process that is similar to yours and you have filed an Objection, you may receive a letter that indicates that your Objection is being held in abeyance pending a judicial ruling on a similar case. You may not receive this letter and after filing your Objection, for many years, may not hear a thing from CRA and upon follow-up be advised that your Objection is under review. 

So what happens when CRA takes many years to render a decision on an Objection and then rejects it?  They have added interest all these years – compounded daily. You can take CRA to tax court to have a judge make a final decision or you can file an application for relief of penalties and interest under the Taxpayer Relief provision. One common ground for Taxpayer Relief is an error on the part of CRA. CRA taking an unfair amount of time to render a decision on an Objection can be grounds. The challenge is that if your Taxpayer Relief application is successful you will only be granted relief of penalties and interest retroactively for 10 years from the date that you file your Taxpayer Relief application. 

For this reason it is vital that your application for Taxpayer Relief is submitted right away. 

There have been countless instances where, on Objection, CRA has agreed to withdraw gross negligence penalties that they initially assessed against you. 

If you know or are accused of having been involved in a charity scheme, it is highly recommended that you seek professional guidance as the consequences of doing nothing or trying to move along on your own could be severe. Charity tax schemes in Canada are common and many Canadians are duped into participating in them each year. What is most important is not that you may have unwittingly been involved in one but that you minimize the damage at the lowest cost in dollar and reputation. 

For more information about charity schemes, Notices of Objection or Taxpayer Relief, please visit www.taxsolutionscanada.com or call 1-888-868-1400.