Tax Disputes & Appeals
Understanding your rights and the process when disagreeing with CRA assessments.
The Dispute Process
Notice of Assessment/Reassessment
CRA issues assessment you disagree with
Timeline: Review immediately upon receipt
Notice of Objection
Formal disagreement filed with CRA
Deadline: 90 days from assessment date (or 1 year from filing deadline)
Tax Court Appeal
If objection denied or no response within 90 days
Deadline: 90 days from CRA's objection decision
Federal Court of Appeal
Appeal Tax Court decision on questions of law
Deadline: 30 days from Tax Court judgment
Filing a Notice of Objection
Required Information
- • Taxpayer name and address
- • Social insurance or business number
- • Tax year in dispute
- • Reasons for objection
- • Relevant facts and law
- • Supporting documentation
Filing Methods
- • Online: My Account or My Business Account
- • Form T400A (individuals)
- • Form T400B (corporations)
- • Letter with all required information
- • Representative authorization (Form T1013)
⚠️ Important: Collections During Objection
Filing an objection does NOT stop collection actions. You must still pay the disputed amount or risk interest and penalties. Consider requesting a payment arrangement if needed.
Tax Court of Canada
Procedure Options
Informal Procedure
- • Federal tax ≤ $25,000 per year
- • Losses ≤ $50,000 per year
- • No lawyer required
- • Simplified process
- • Filing fee: $100
General Procedure
- • Any amount in dispute
- • Complex legal issues
- • Lawyer recommended
- • Formal court rules
- • Filing fee: $250
Success Factors
- • Strong documentation and evidence
- • Clear legal arguments
- • Credible testimony
- • Professional representation
- • Understanding burden of proof
- • Preparation and organization
Common Dispute Types
Business Expenses
- • Reasonableness of expenses
- • Personal vs. business use
- • Documentation requirements
- • Home office claims
- • Vehicle expenses
Income Classification
- • Employment vs. self-employment
- • Business vs. capital gains
- • Canadian vs. foreign source
- • Active vs. passive income
- • Taxable vs. non-taxable benefits
Residency Issues
- • Factual residence determination
- • Deemed residence rules
- • Departure tax disputes
- • Treaty tie-breaker rules
- • Provincial residence
Penalties & Interest
- • Gross negligence penalties
- • Late filing penalties
- • Repeated failure to report
- • Due diligence defense
- • Interest relief requests
Cost Considerations
Potential Costs
- • Legal fees: $300-$800/hour
- • Expert witnesses: $2,000-$10,000+
- • Court filing fees: $100-$250
- • Document preparation
- • Lost time from work
- • Travel to hearings
- • Interest on amounts owing
- • Possible costs award if lose
Consider cost-benefit analysis before proceeding with appeals.
Prevention Strategies
Documentation
- • Keep all receipts
- • Maintain logbooks
- • Document business purpose
- • Save correspondence
Compliance
- • File on time
- • Report all income
- • Claim reasonable expenses
- • Seek professional advice
Communication
- • Respond to CRA promptly
- • Be honest and complete
- • Request clarification
- • Document all interactions
Facing a Tax Dispute?
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