Notice of Objection & Voluntary Disclosures Program
The ability to file a Notice of Objection to Notices of Re/assessment issued following a Voluntary Disclosure, governed by IC00-1R6-Voluntary Disclosures Program (“IC00-1R6”), was limited to specific circumstances. Importantly, taxpayers could not file a Notice of Objection to dispute the decision to accept or deny the application. Being a discretionary decision, additional internal and ultimately judicial review in Federal Court was and still is necessary. However, IC00-1R6 identified exceptions as to when a Notice of Objection could be filed to a Notice of Re/assessment issued following a disclosure.
With the revised program, as of October 1, 2025, information circular IC00-1R7-Voluntary Disclosures Program (“IC00-1R7”) does not specifically reference those limited circumstances. However, absent legislative changes they still exist.
CRA Updates the Voluntary Disclosures Programs
In October of 2025, Canada Revenue Agency (“CRA”) introduced a simplified and more generous version of the voluntary disclosures program (“VDP”), governed by IC00-1R7. As of October 1, 2025, only audits and investigations started prior to a disclosure will invalidate the “voluntary” requirement.
Overall, the program has improved for Canadians. Even if CRA contacts a taxpayer about non-compliance (other than advising of an audit or investigation) the person can still receive 100% penalty relief, including from criminal prosecution, and at least 25% interest relief. Otherwise, 100% penalty relief and 75% interest relief.
Review of Discretionary Decisions – Administrative & Judicial Review
Decisions made under the Voluntary Disclosures Program are discretionary. If you disagree with the CRA’s initial decision, the first option is to request a second administrative review. The request must be made in writing and is reviewed by a senior CRA official who was not involved in the original decision.
If the outcome of the second administrative review is still unfavourable, the next option is to apply for judicial review in the Federal Court of Canada. A judicial review does not reassess your tax situation or decide whether you should have received VDP relief. Instead, the Court examines whether the CRA’s decision-making process was reasonable, lawful, and procedurally fair. There are strict timelines, generally 30 days from the date of the CRA’s decision.
IC00-1R7 & Objection Rights
Under the old program (IC00-1R6) there was specific reference to limited objection rights. IC00-1R6 stated that a taxpayer was able to file a Notice of Objection “in circumstances where the assessment includes a calculation error, relates to a characterization issue (such as income versus capital gain treatment), or relates to an issue other than the matter disclosed in the VDP application…”
As per IC00-1R7, in the normal course, discretionary decisions by CRA are subject to judicial review. This applies to the decision to accept or deny a voluntary disclosure application. According to IC00-1R7:
[t]here is no right of objection for a decision made under the VDP as legislation does not give a person the right to dispute a discretionary decision about providing VDP relief. Under subsection 165(1.2), a taxpayer is prohibited from filing an objection to dispute the assessment of penalties and interest made under subsection 220(3.1). However, a taxpayer has the option to request relief of interest and any penalties payable that was not granted under the VDP, but may be in line with the taxpayer relief provisions in other legislation as described in Information Circular IC07-1R1, Taxpayer Relief Provisions.
IC00-1R7 does not mention exceptions to the no objection rule. However, if a reassessment is issued following a disclosure there is currently no legislation preventing a taxpayer from objecting to, for example, the calculation of tax owing.
Note, if an application is denied and the taxpayer is unable to seek judicial review in Federal Court, a Taxpayer Relief request for relief from penalties and interest can be made. This does not include relief from criminal investigation or prosecution and the outcome of the request is less certain.
SpenceDrake Tax Law – 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.