I have seen quite a few people in my career as a tax lawyer come to me wanting to challenge an income tax assessment or reassessment from the Canada Revenue Agency.
The worst thing I see at that first interview is that they have missed the deadline to file a notice of objection to that assessment. This is almost always the kiss of death that could have been prevented if people were aware of this vital deadline.
The deadline to dispute an income tax assessment is 90 days.
That is not much time, just three months. Plus the clock starts running from the date the assessment is issued.
That is not the date it is received by the taxpayer, that is the issue date on the assessment. Usually assessments are mailed to the taxpayer by CRA and this means the taxpayer has already lost some time to object.
Many taxpayers believe they can contact the CRA and discuss this with an officer. This is the next big mistake, talking about a dispute with the government just wastes more time.
To properly dispute an assessment, a written formal notice of objection must be filed within 90 days of the issue of the assessment or reassessment. A telephone conversation does not count as a notice of objection and a notice of objection is the only way an assessment can be challenged.
However, the CRA officer will not always tell a taxpayer this and there is no reason for them to do so. The notice of objection procedure is on the back of the assessment, although most taxpayers who are not aware of this will miss it completely.
Say you miss the 90-day deadline, are you out of luck? I am going to give the typical lawyer answer: it depends.
An extension of time application of up to one year can be made to the CRA if the 90-day deadline is missed. However, a taxpayer must show a good reason for why they missed the deadline for CRA to grant the extension of time. If the extension of time is denied by CRA, then the taxpayer can make an appeal to the Tax Court of Canada to have the extension of time application reconsidered, but the taxpayer must still prove they had a good reason for missing the 90-day deadline.
This process is time consuming, costly (if you have a lawyer) and completely avoidable.
So what happens if you miss the 90-day deadline and any possible extension of time deadline?
Then you are most likely out of luck. It does not matter if the notice of objection would have been successful, the Tax Court of Canada will dismiss most appeals where the taxpayer does not meet the filing deadlines.
There is one notable exception, when CRA mails an assessment to the wrong address, there are court rulings that no valid assessment was made and it has to be reissued by CRA, thereby resetting the timeline to file a notice of objection.
The important thing to remember is that if you receive an assessment from CRA then do not delay.
Get professional advice immediately or at the very least download the appropriate form (the T400A form) from the CRA website and file an objection within 90 days of the date on the assessment.
If you do not do this, you face a much greater hurdle in disputing the assessment, if you are able to dispute it at all.
Robert Daniel Lyons is a tax lawyer based in Vanderhoof. He can be reached through his website at lyonstax.ca.
