Appealing an Assessment Before the Tax Court of Canada

by Craig Anthony

3 min read

When you disagree with a tax assessment from the Canada Revenue Agency, there are many avenues that allow you to try to resolve the issue without going to court, from administrative discussions with the CRA auditor all the way through the objection process. At the end of these steps, if the disagreement persists, you will need to take it to the next level – the Tax Court of Canada.

The Tax Court of Canada

Established in 1983, the TCC is the court that has jurisdiction to hear litigation concerning income taxes, GST/HST, customs, and many other similar matters. The TCC’s jurisdiction is exclusive, which means that no other court can hear cases about these matters. The Court has 18 registry offices located throughout Canada and regularly hears cases in over 50 cities. The TCC is comprised of approximately 25 judges that are appointed by the federal government. It is completely independent of the CRA and has its own practice rules and procedures. Its hearings are conducted in both English and French, with interpreters available for those who need them.

Filing an Appeal in the Tax Court of Canada

The proper way to begin proceedings before the TCC is to file an appeal. While this may seem an odd choice of words, what you’re actually doing is appealing the CRA’s decision regarding your notice of objection. The appeal will be heard and decided by a single judge, who will evaluate the evidence based on the documents submitted and an in-person hearing where witnesses may be presented and cross-examined by both you and the CRA. There is one key rule about filing an appeal with the TCC: You must file your appeal within 90 days of receiving the CRA’s decision on your notice of objection. Failure to do so results in the loss of your right to appeal. While it’s possible to receive an extension, it’s very difficult and only occurs with the Court’s permission and in exceptional circumstances.In all cases, you must file appeals in writing. When filing, you may be able to choose between having your case heard under the informal procedure rules or the general procedure rules.

Informal Procedure

As its name implies, the TCC’s informal procedure is a simpler, quicker way to have your appeal heard. To use it, you must meet certain criteria and make the express choice of being heard under the informal procedure. Otherwise, the general procedure applies. An appeal qualifies for the informal procedure if the disputed amount of federal tax and penalties is not more than $25,000 per assessment, the disputed loss amount is not more than $50,000 per determination, or if interest on federal tax and on penalties is the only matter in dispute. The main benefit of the informal procedure for taxpayers and small businesses is that the procedural rules and the rules for presenting evidence are more relaxed. The goal is to resolve appeals as quickly as possible. Appeals under the informal procedure should be heard within 180 days of being filed, and judgments should be rendered within 90 days of a case being heard. There is no filing fee for filing an appeal under the informal procedure, and the court costs for the losing party are less than under the general procedure. Although you’re entitled to choose to be represented by a lawyer under these rules, you may also opt to represent yourself or have someone else, such as your accountant, make representations to the judge.

General Procedure

If you don’t qualify for or choose not to use the informal procedure, then your appeal will be heard under the general procedure. This is a stricter set of rules that functions similarly to most superior courts in Canada. There are specific rules regarding the filing of an appeal, rules of evidence, examinations for discovery, and production of documents. There is also a filing fee, ranging between $250 and $550. In the general procedure, only lawyers may represent you if you don’t represent yourself. Corporations have to be represented by lawyers. The losing party may have to pay some or all of the winning party’s legal costs. An appeal under the general procedure routinely takes more than a year to be heard, with some larger cases taking several years. Once the TCC has ruled in your appeal, you or the CRA may disagree with the ruling. In that case, it’s possible to push the legal process even further by appealing the decision to the Federal Court of Appeals or even, in some cases, to the Supreme Court of Canada.

References & Resources

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