Covid Benefit Disputes
When it comes to the Canada Emergency Response Benefit (CERB) or Canada Recovery Benefit (CRB) and similar Covid benefits, taxpayers disputing benefit denials have the option of two internal Canada Revenue Agency (CRA) reviews before pursuing an application for judicial review in Federal Court. The Notice of Objection and Tax Court appeal process do not apply.
Notice of Determination & Notice of Redetermination
CERB recipients, for example, received a Notice of Determination of their CERB benefits. If there is an adjustment to the amount of the benefit the CRA issues a Notice of Redetermination.
Notice of Determination: This is the first official notice issued by the CRA after they have assessed your claim or application. It informs you whether or not you qualify for a benefit, how much you are entitled to, and the timeframe for payments, if applicable. It can also include information on whether there was an overpayment or underpayment.
Notice of Redetermination: This is issued when the CRA reassesses or reevaluates a previous decision after additional information has been provided or if there has been a subsequent review. For instance, if you initially received a decision stating that you were ineligible for a benefit, and you later provide more supporting documentation or clarification, the CRA may issue a Notice of Redetermination to update or change the original decision.
Application to Federal Court for Judicial Review
If CRA denies or adjusts Covid benefits and issues a Notice of Redetermination, such as for CERB, a taxpayer may be left with Federal Court as the only option to dispute the redetermination following a CRA review. Importantly, the CRA appeals division will not accept a Notice of Objection filed against a Notice or Determination or Notice of Redetermination of CERB or similar Covid benefits.
Not Considered Part of the Assessment of Tax, Penalty, and Interest
A Notice of Objection is the initiating document to an internal CRA appeal process that a taxpayer can follow to dispute a tax assessment including a Notice of Assessment, Notice of Reassessment, Notice of Additional Assessment, and certain Notices of Determination or Redetermination (e.g. of losses).
Once a Notice of Objection is filed the dispute will be handled by a CRA Appeals Officer. If the Notice of Objection is unsuccessful the next step is an appeal to the Tax Court of Canada. The objection process is streamlined and relatively easy to follow. A Tax Court appeal is more complicated but the process is streamlined as well.
If a taxpayer attempts to file a Notice of Objection to a Covid benefit Notice of Re/determination such as for CERB, CRA will respond similar to we “cannot accept this as a valid objection because that issue is not considered part of the assessment of tax, penalty, and interest.”
Notably, for example, the CERB legislation is the Canada Emergency Response Benefit Act, SC 2020, c 5, s 8, and it does not explicitly provide the right of appeal through the regular tax dispute process (Notice of Objection, Tax Court and beyond). Hence, Federal Court judicial review.
Situations where you Cannot File an Objection according to the CRA
According to CRA, the list below specifies some items that cannot be objected to. Furthermore, “objections that are not considered part of the assessment of tax, penalty, and interest cannot be accepted.”
Registered Retirement Savings Plan (RRSP) and/or Tax-Free Savings Account (TFSA) room statement
Carryforward balances
T2 accounts – statute barred refund
Other accounts – statute barred refund
Home Buyers Plan (HBP) balances
Refund Interest
Tax Deducted at source
CPP/EI refunds
Old Age Security (OAS) recovery tax
Refundable Quebec abatement
Set-offs (internal or external)
Reassessments processed under the Taxpayer Relief provisions
Statements of Account…
Note, if you receive a reassessment after submitting an objection, it will invalidate your original objection. However, you have the option to file a objection to the new reassessment.
SpenceDrake Tax Law – Toronto Tax Lawyers
Disclaimer
Each article/blog post is only meant to provide general information. It is posted on a specific date. Laws and rules change. Please know that it may be out of date. It is not meant to provide legal advice, and it does not provide legal advice. It cannot be relied on. Every tax situation is unique, and that may mean situations differ from this article/blog. If you have legal questions, please consult a lawyer.