Filing a Notice of Objection – The First Step in a Dispute with CRA

This article provides an overview of what is, for many taxpayers, the first step in a dispute with Canada Revenue Agency (“CRA”) – the “Notice of Objection”. For most people, dealing with their taxes entails gathering all their t-slips and other relevant information and handing it off to their accountant or doing it themselves at home. They receive an assessment, pay what they owe, or receive a refund. That said, sometimes CRA can disagree with what was reported on the taxpayer’s return (and “taxpayer” used in this article refers to individuals, corporations, and other tax entities) and issues a “Notice of Reassessment”. Other times, CRA issues an “Arbitrary Assessment” because the taxpayer has failed to file a return.


Once a Notice of Objection is filed, the taxpayer can expect to receive a letter from CRA acknowledging the receipt of the objection. The CRA will assign an appeals officer to the file (which can sometimes take some time), who will impartially review the objection. In some cases, the appeals officer will ask the taxpayer for additional information or explanation.


From the time the Notice of Objection is filed, CRA halts its collections enforcement actions against the taxpayer until the objection is resolved (with the exception of GST/HST). However, interest will continue to accrue on any unpaid amounts of tax owing. Generally speaking, a taxpayer should try to pay off the amount in dispute if at all possible; if the objection is successful, the taxpayer will receive a refund. However, if the objection is unsuccessful, a substantial amount of interest may have accrued.


The deadline for filing a Notice of Objection is ninety days from the date of the Notice of (Re)assessment. If this deadline is missed, an extension of up to one year from its expiration date may be granted. Generally, in order to have the extension granted, the taxpayer must show that they were unable to object in time or had a bona fide intention to object to the assessment, and that the objection was made as soon as circumstances permitted it to be made.
A successful Notice of Objection will address the relevant legal tests, why a certain amount should be allowed or granted, and should contain evidence to support its position. Although CRA has published many guidelines for taxpayers in the form of information circulars, tax folios, and other publicly available information, it is important to note that oftentimes, the analysis in an objection is driven by the particular circumstances surrounding the reassessed amount. For example, in a determination of whether a sale should be taxed as regular income or capital gain, one of the considerations is whether the taxpayer’s intention is consistent with other evidence indicative of a “trading” nature.


A Notice of Objection can be filed to most tax reassessments, although there are different deadlines and rules surrounding extensions of time for some tax statutes. For example, there is no extension request available if the objection deadline is missed for a reassessment under the Canada Pension Plan. If you have been issued a Notice of Assessment, Notice of Reassessment, or are unsure if you can object to a tax assessment of some sort, contact one of our tax lawyers for a consultation.