Tax Dispute Resolution in Toronto

Taxpayers in Toronto may sometimes receive a Notice of Assessment that disagrees with their tax returns. The Canada Revenue Agency (CRA) sends these notices to inform taxpayers about a problem with their income tax filing.

Most people might find that stressful, but the situation is not necessarily dire. Tax accountants in Toronto are familiar with these notices and can help clients understand what they mean. In many cases, the dispute may be a simple error that a tax accountant can handle easily. More complex issues may require filing a Notice of Objection.

Dispute Resolution Process

Suppose you receive a Notice of Assessment and find the CRA disallowed or reduced valid deductions on your return. That would increase the amount of tax you owe for that year. You can challenge the assessment with the help of a tax accountant. They can go through the process of tax dispute resolution in Toronto.

Contact the CRA

The first step is to contact the CRA to discuss the issue over the phone or through a letter. Using the example above, your tax accountant will ask why the deductions were disallowed or reduced.

Based on the CRA’s response, your tax accountant may agree with the reason. If they agree, then the assessment stands. However, if the deduction was an error, the accountant can argue for a reassessment without filing a formal objection.

File a Notice of Objection

If the accountant cannot resolve the matter informally, they may recommend filing a formal Notice of Objection. Note that the deadline for filing is 90 days from the date of receiving the assessment. You can file online as individuals or businesses or by mail using Form T400A. Your accountant will outline the facts and valid reasons for your objections.

Cooperate with the appeals officer

The CRA will delegate an appeals officer to review your objections and assess the available information. In most cases, it involves attending meetings, taking calls, or responding to letters.

The goal is to give the CRA the necessary information so the appeals officer can make a proposed decision. If you disagree with the proposal, you can request the CRA to have another appeals officer review the case. Your tax accountant can handle all that.

File a case with the Tax Court

The final decision will come from the appeals officer, which may uphold your objection, the assessment, or involve a compromise. If you dispute the final decision, you can take the case to the Tax Court of Canada and up the litigation ladder.

How far should you go?

Disputing a tax assessment does not have to go to extremes. The objective is to resolve the dispute as quickly and cost-effectively as possible. While litigation might make sense if it involves a large amount of money, it is also expensive. You may need to hire a tax lawyer to represent you.

Based on the circumstances, your tax accountant can advise you on how far you should go. They can assess if your case has solid grounds to go to court. If the facts can go either way, accepting the final decision might be more practical, even if you disagree.