By OptiVal Editorial Desk

Notice of Objection in Canada: How to Dispute a CRA Assessment in Time

Filing a notice of objection in Canada is how you formally dispute a CRA assessment you believe is wrong, and the clock starts the day the notice is sent, not the day you open the envelope. For a corporation, that clock is 90 days, full stop.

Miss it and a wrong assessment becomes a payable one, even if your books were right all along. Filing costs nothing, and an appeals officer uninvolved in the original assessment reviews your case.

What a notice of objection in Canada actually is

An objection is a formal request for an impartial review, for when you think CRA misinterpreted the facts or applied the tax law incorrectly, as CRA’s page File an objection: Income tax puts it.

It is not a complaint, and it is not a phone call. A call can fix a simple slip, but it does not protect your rights. Only a filed objection stops the deadline expiring while you talk. If CRA agrees with you in whole or in part, it adjusts the return and sends a reassessment. If it disagrees, it sends a notice of confirmation. The decision comes from the Appeals Division, not the auditor who assessed you.

The deadlines, by type of notice

• Corporations (T2): 90 days from the date of the notice of assessment or reassessment.
• Individuals and graduated rate estates (T1): the later of one year after the return’s filing deadline, or 90 days from the date of the notice.
• TFSA and RRSP contribution disputes: 90 days from the notice, even for individuals.
• GST/HST: 90 days from the date of the notice, under a separate process covered below.

Worked example: a reassessment dated March 2 gives you until May 31. Filing June 1 without an approved extension is late. File well before the last day.

What you cannot object to

Three limits catch people out. First, you can only object to an actual notice: an assessment, reassessment, determination, or redetermination. A statement of account is not objectable, and neither is an auditor’s proposal letter. Respond to that letter, with documents, because a good response can prevent the reassessment entirely, but the objection clock has not started yet.

Second, in a loss position there is no objection to file, because no tax, interest, or penalty is in dispute. Ask CRA in writing for a notice of loss determination instead, and object to that once issued. Third, one notice, one objection: a second year, or your GST/HST account, needs its own filing.

How to file, step by step

For income tax, you have three routes:

• Online: sign in to My Business Account (or My Account for individuals) and choose “Register my formal dispute”. You get a case number on the spot; use it when uploading documents through the Submit documents service. An authorized representative can file the same way in Represent a Client.
• By mail or fax: complete Form T400A, Notice of Objection: Income Tax Act, or send a signed letter setting out the facts and reasons, to the Chief of Appeals, Appeals Intake Centre, 1050 Notre Dame Avenue, Sudbury ON P3A 5C1.

For GST/HST, the online routes are the same, but the paper form is Form GST159, Notice of Objection (GST/HST). CRA’s page, File an objection: GST/HST, confirms the same 90 day deadline and intake centre. Keep proof of your filing date.

What a strong objection contains

A strong objection is organized issue by issue:

• The notice, the tax year, and the amount in dispute for each issue.
• What CRA changed, and why it is wrong, facts first and law second.
• Documents that prove each point: invoices, contracts, logs, bank records, filed slips.
• The relief you want, as a number. Not “the reassessment is unfair”, but “reduce business income by $24,000, the vehicle expenses supported by the attached logbook”.

Large corporations must work this way by law; copying the format makes any file easier to allow. One caution: documents CRA asked for during the audit, provided now for the first time, can get your file sent back for a second review. Say briefly why they were not available earlier.

Missed the deadline? The extension window

If the deadline has passed, you can apply for an extension of time, in writing to the Chief of Appeals at your Appeals Intake Centre, up to one year after the deadline passed. The application travels with your objection, and must explain why you did not file on time (trying to resolve the issue with the assessing office counts, as do circumstances beyond your control), plus the facts and reasons behind the objection. After that one year window, the door is shut.

Do you have to pay while you wait?

Usually, no, for income tax. Most disputed income tax amounts are not payable until CRA finishes its review, and collection is usually delayed until 90 days after the decision is sent. Three exceptions matter:

• Payroll source deductions you withheld and had to remit. CRA will not postpone collection on these, objection or not.
• Large corporations must pay half of the disputed amount when they file.
• Assessments tied to charitable donation tax shelter credits also require half up front.

Interest is the catch. It keeps running while the dispute plays out, and objections can take months. Paying some or all of the disputed amount stops that interest without giving up your objection. If you already paid and CRA has not decided within 120 days of filing, you can ask for the amount back while you wait. If the penalties or interest are themselves the unfair part, that is a separate relief request; our guide to CRA taxpayer relief in Canada covers it.

After CRA decides: the Tax Court is next

If CRA confirms the assessment and you still disagree, the next step is an appeal to the Tax Court of Canada, an independent court. CRA’s guide, Appealing income tax assessments to the Tax Court of Canada, sets the deadline: the appeal must reach the Court within 90 days of the date CRA sent the confirmation or reassessment.

Smaller disputes may qualify for the Court’s informal procedure, generally where the federal tax and penalties in dispute are no more than $25,000 per assessment, or the loss is no more than $50,000. If CRA simply does not decide, you do not wait forever: for income tax you can appeal once 90 days have passed since filing with no decision; for GST/HST, that period is 180 days.

Getting a reassessment reviewed properly

Objections are won on deadlines and documents, and both live in your books. Our bookkeeping and tax services include CRA correspondence support and reassessment reviews: T2 returns from $449, bookkeeping from $199 a month, advisory at $125 an hour, CAD, HST extra; see our published pricing. Led by qualified professionals with more than 75 years of combined experience, PwC-trained, we keep records that make an objection straightforward.

Sitting on a reassessment you think is wrong? Book a free consultation before the 90 days run out, and we will map your deadline and documents in one sitting.