While no two tax returns filed with the Canada Revenue Agency are identical, all such tax returns have one thing in common. Once those tax returns are filed, the CRA will review the income amounts reported and the tax deduction and credit claims made, and issue a Notice of Assessment (NOA) outlining its conclusions with respect to the taxpayer’s tax situation for the year.
When all goes well, the figures listed and the tax result obtained on that NOA will agree with the numbers submitted by the taxpayer on their return. In most cases, the filing of the return will result in a tax refund owed to the taxpayer, while for others there will be a tax balance owed.
Matters get more complicated where the CRA is not in agreement with the information provided or the claims made by the taxpayer in their return and, especially, where the CRA finds that additional tax must be paid by that taxpayer. When that happens, the taxpayer has to decide whether to dispute the decisions made by the CRA as outlined in the NOA for the year.
There are a lot of reasons why the CRA may disagree with the taxpayer, and in many cases disputing the CRA’s findings really doesn’t make sense. While the use of tax return preparation software has greatly reduced the number of clerical or arithmetical errors made on a return, and minimized the chances of the taxpayer claiming a tax credit to which they are not entitled, those errors can still occur. And, where that has happened and the CRA correctly identifies the error, there’s nothing to be gained by disputing their conclusions.
In many other cases, however, the taxpayer may genuinely feel that the conclusions reached by the CRA are simply incorrect. Our tax system is very complex, and the rules governing the circumstances in which a particular deduction or credit can be claimed are very detailed. In many cases, there can be a genuine question about whether, for instance, a business expense or an out-of-pocket medical cost can be claimed for tax purposes. Where the taxpayer believes that a claim made should have been allowed but was not, the next step to take is to find out why.
To do so, it’s best to contact the Agency directly for an explanation of their decision. Taxpayers can call the Individual Income Enquires line at 1-800-959 8281 where client service agents who have access to individual tax files can provide additional information on the Agency’s decision. Taxpayers who call that line should ensure that they have a copy of the NOA and/or their tax return for the year, as they will be required to provide information from that return (at a minimum, their name, social insurance number, address, and probably one or more figures from the return) before any confidential tax information can be discussed or disclosed.
Where the matter can’t be resolved to the taxpayer’s satisfaction by talking to the CRA, it’s then time to consider filing a formal dispute. The easiest way by far of doing so is to file the dispute online, through the CRA’s My Account service, but to do so, the taxpayer must already be registered for that service.
At one time, registering for My Account was a fairly lengthy process, involving a wait for a security code to be sent by regular mail, but recent changes to CRA procedures have streamlined that process. Essentially, a taxpayer who wants to register for My Account needs to submit a photograph and an accepted identification document (for instance, a Canadian passport or driver’s licence) online to verify their identity. Detailed information on the available options to become registered for My Account and the procedures to be followed can be found on the CRA website at https://www.canada.ca/en/revenue-agency/services/e-services/cra-login-services/register-cra-sign-in-services.html.
Taxpayers who are using My Account to file a Notice of Objection can do so by logging in online at https://www.canada.ca/en/revenue-agency/services/e-services/e-services-individuals/account-individuals.html. Once logged in, it’s necessary to click on the “File a formal dispute” from the listing on the left-hand side of the page. The taxpayer then provides information with respect to the assessment being disputed and the reasons why the assessment is being disputed and submits those reasons by clicking on the Submit button at the bottom of the “File a formal dispute” page. Taxpayers who are disputing their tax assessment through My Account can also scan and send supporting documents relating to that dispute to the Agency.
While filing a dispute through My Account is certainly faster than mailing (or faxing) hard copy of the Notice of Objection, not all taxpayers want to use that option. Taxpayers who choose instead to file their objection using hard copy of a Notice of Objection form can find the most current version of the CRA’s standardized T400A Objection on the Agency’s website at T400A Notice of Objection – Income Tax Act – Canada.ca.
Taxpayers aren’t obligated to use the CRA’s official Notice of Objection form – any communication which makes it clear that the taxpayer is objecting to their Notice of Assessment will do. Nonetheless, there’s no reason not to use the standardized form, and there are benefits to doing so. Using the T400A form will make it clear to the CRA that a formal objection is being filed, will present the necessary information in a format with which the Agency is familiar, and will also mean that no required information is inadvertently omitted. It’s also helpful to include a copy of the Notice of Assessment which is being disputed. Taxpayers should also consider ensuring proof of both delivery and time of delivery by sending the form or letter to the Appeals Intake Centre in a way which provides for tracking and proof of delivery.
There is a single Appeals Intake Centre, and the mailing address for that Centre can be found on the CRA’s Notice of Objection form. A Notice of Objection can also be faxed to the Appeals Intake Centre, and the fax numbers for that Centre are available on the CRA website at File an objection – Income tax – Canada.ca. Finally, taxpayers can contact the CRA at its objection enquires phone line in order to get information about the status of one’s appeal. The toll-free telephone number for calls from within Canada to that line is 1-800-959-5513. Taxpayers who filed their objection through My Account can find out the status of their appeal by checking the “Progress Tracker” feature on that service.
Filing a Notice of Objection, by any method, formally advises the CRA that the taxpayer is disputing the Agency’s determination of their tax liability for the taxation year in question. Not incidentally, the filing of an Objection also brings to a halt most efforts undertaken by the CRA to collect taxes which it considers owing for the taxation year under dispute (although, if the taxpayer is eventually found to owe an amount in dispute, interest on that amount will have accumulated in the interim). Where the taxpayer files an Objection, the CRA’s collection efforts are, in most cases, suspended until 90 days after the date the CRA’s decision on that Objection is sent to the taxpayer.
There is a time limit by which any Objection must be filed, albeit a reasonably generous one. Individual taxpayers must file an Objection by the later of 90 days from the mailing date of the Notice of Assessment (the date found at the top of page 1) or one year from the due date of the return which is being disputed. So, for tax returns for the 2024 tax year, the one-year deadline (which is usually, but not always, the later of those two dates) would be April 30, 2026 (or June 16, 2026 for self-employed taxpayers and their spouses). As with most things related to taxes, it’s best not to put it off. At the very least, if the taxpayer is ultimately found to owe some or all of the taxes assessed by the CRA, interest will have accrued on those taxes for the entire period since the filing due date and, if the filing of the Objection is delayed, the CRA may well have already commenced its collection efforts.
In the course of making its decision, the Agency may or may not contact the taxpayer for further discussions of the issues in dispute. Should the taxpayer be contacted, they may be asked to provide representations outlining their position in writing or at a meeting. Through such representations and meetings, it may be possible for the taxpayer and the CRA to come to an agreement on the taxpayer’s tax liability. In either case, the CRA will either confirm its original assessment or change it. If the original assessment is changed, the CRA will issue a Notice of Reassessment outlining the changes. If the taxpayer continues to disagree with the CRA’s position, the next step is an appeal to the Tax Court of Canada. Once matters reach this point, it’s generally a good idea to consult a lawyer before deciding to file an appeal.
Detailed information on the objection process is available on the CRA website at File an objection – Income tax – Canada.ca. The Agency also publishes a useful pamphlet entitled Resolving Your Dispute: Objection and Appeal Rights under the Income Tax Act, and the most recent release of that publication can be found on the CRA website at P148 Resolving your dispute: Objection rights under the Income Tax Act – Canada.ca.
The information presented is only of a general nature, may omit many details and special rules, is current only as of its published date, and accordingly cannot be regarded as legal or tax advice. Please contact our office for more information on this subject and how it pertains to your specific tax or financial situation.
