Appealing to the Tax Court of Canada
The initial step in disputing your tax assessment is to file a Notice of Objection and make your case to a Canada Revenue Agency (“CRA”) Appeals Officer (after a CRA audit, for example). If you disagree with the conclusion reached by the CRA Appeals Officer, you can appeal to the Tax Court of Canada. A taxpayer can also choose to skip the Notice of Objection process and appeal directly to the Tax Court.
A Notice of Appeal has to be filed no later than 90 days from the date of the Notice of Assessment, Reassessment, Determination, Redetermination or Confirmation. An extension request can be made.
The Tax Court of Canada hears appeals under either the informal procedure or the general procedure. If you do not choose the informal procedure, the default is the general procedure. The informal procedure is less stringent in regards to process and is more flexible in order to accommodate unrepresented taxpayers.
Informal Procedure
Eligibility: A taxpayer will qualify to dispute their tax assessment through the Tax Court’s informal procedure if:
the amount in dispute is $25,000 or less per assessment;
the loss in dispute (Notice of Determination or Redetermination) does not exceed $50,000 per determination; or
only penalties and interest are in dispute.
A taxpayer must indicate on the Notice of Appeal that they are selecting to proceed to Tax Court of Canada using the informal procedure.
General Procedure
Eligibility: The default is the general procedure unless you select the informal procedure.
Notice of Appeal - Appealing to the Tax Court of Canada
The Tax Court of Canada is a Federal Court. This means that it hears cases pursuant to Federal law, including the Income Tax Act and Excise Tax Act (GST/HST). Appeals are to the Federal Court of Appeal.
The first step to filing a tax appeal is to draft a Notice of Appeal. From the date of the assessment under appeal (e.g. Notice of Reassessment, Notice of Confirmation), you have 90 days to prepare and submit the Notice of Appeal. Extension requests can be made.
The Notice of Appeal to the Tax Court should contain the following:
(a) In the case of an individual state home address in full and in the case of a corporation state address in full of principal place of business in the province in which the appeal is being instituted;
(b) Identify the assessment(s) under appeal: include date of assessment(s) and, if the appeal is under the Income Tax Act, include taxation year(s) or, if the appeal is under the Excise Tax Act, the Customs Act, the Air Travellers Security Charge Act, the Excise Act, 2001 or the Softwood Lumber Products Export Charge Act, 2006, include the period to which the assessment(s) relate(s);
(c) Relate the material facts relied on;
(d) Specify the issues to be decided;
(e) Refer to the statutory provisions relied on;
(f) Set forth the reasons the appellant intends to rely on;
(g) Indicate the relief sought; and
(h) Date of notice.
Appealing to the Federal Court of Appeal & Supreme Court of Canada
If the Tax Court did not rule in your favour you have the right to appeal to a higher court such as the Federal Court of Appeal. If you wish to take your case to the Federal Court of Appeal, a Canadian Tax Lawyer has to file a Notice of Appeal within 30 days of the Tax Court of Canada ruling. Extensions requests may be granted under certain circumstances.
The Federal Court of Appeal can dismiss the appeal or render a new decision. In some instances, it will send the case back to the Tax Court. The mandate of the Court is to review the Tax Court of Canada’s decision and determine if the interpretation and application of the law was correct.
Few cases will go beyond the Federal Court of Appeal. However, if you disagree with the decision, there is one last right of appeal: requesting an hearing before the Supreme Court of Canada. In the very rare circumstance your appeal is accepted to be heard by the Supreme Court, it will review the decision by the Federal Court of Appeal.
Contact us for a free consultation. We will review your facts and outline the steps necessary to challenge CRA’s position.
SpenceDrake Tax Law