Objecting a CRA Assessment

Canadian tax law includes the ability to object to an assessment by Canada Revenue Agency ("CRA") There are many reasons to file an objection. These are some of the most common reasons to file an objection:

• Uncertainty about whether or not the CRA will allow a request for adjustment to an income tax return.
• After an audit of a tax year, the CRA changes a taxpayer's income taxes liability.

Deadline for filing a Notice Of Objection. Before you file a notice of objection, it is important to be aware of the limitations on time. Individuals and GREs must file a notice of objection at CRA Intake Centres on or before:

• One year following the taxpayer's due date for filing the tax return;
• 90 days from the date of a notice indicating assessment.

Corporations and taxpayers must serve the notices of objection within 90-days of the date of the notice.

A taxpayer can apply to the CRA for an extension of time if they miss the deadline to object. The taxpayer must also explain why the late-filed objection was made. The CRA can accept or reject the late-filed elections at its discretion. You can appeal to Canada's Tax Court if the CRA rejects your application.

Format for Completing an Notice of Objection
Online and postal objections can be filed by taxpayers. While the Form T400A is most commonly used, it is not required to be filled out when filing an objection in writing.

The taxpayer should at a minimum state that they object to a particular assessment. It is best to explain all facts and reasons why you object. This is a common practice based on past experience. Once a CRA Appeals officer has been assigned to your file, this will speed up the process. You may be able to give additional information to an Appeals Officer for review, even information not available at the time the audit was conducted.

Large corporations
Notices of objection must be filed by large corporations. If the combined taxable capital of all corporations in Canada exceeds $10,000,000 at the end, a corporation is considered large.

The CRA handles processing
Usually, the CRA sends an acknowledgment letter within 30 working days after receiving a notice. Each objection will be assessed by the Intake Centre. The CRA's current Service Standards indicate that the CRA has a target of processing an objection in 180 days for a low-complexity and 365 days respectively for medium and high complexity. As of November 2018, large-file objections took an average 690 days to process.

A CRA Appeals Officer reviews a notice of objection. The Appeals Division is independent from the Audit branch. The Appeals Officer should be objective in reviewing objection notices.

Payment of Disputed Summaries
A taxpayer is not required to pay any tax, interest, or penalty if an amount has been disputed. However, interest will continue to accrue on the disputed tax during this time. To avoid additional interest charges, it is recommended to pay off the balance.

When a company objects to an assessment, it is required to pay 50%.

Last Thoughts
All Canadian taxpayers have the option to file an objection if they disagree with an assessment made after an audit. Because of the volume in CRA's system, objections can take up to one year to be reviewed. It is worthwhile if you disagree about the auditor's findings