If I win my CRA dispute, will CRA pay my legal costs?

At the CRA objection stage, there is no mechanism to recover your professional fees even if CRA ultimately concedes the assessment. The objection process is an administrative review, not a court proceeding, so cost awards are not available. You bear your own costs regardless of the outcome.

If your dispute proceeds to the Tax Court of Canada, the situation is different. Under the general procedure, the court has discretion to award costs — typically following a tariff schedule rather than full reimbursement of actual fees. A successful taxpayer may recover a portion of their legal costs from CRA, but rarely the full amount. The court considers factors such as the result, the conduct of the parties, and whether CRA's position was reasonable.

Under the informal procedure, costs are more limited. In some circumstances the court may award a small amount to reimburse disbursements, but recovery is modest.

This cost structure is worth considering when deciding how vigorously to pursue a dispute. If the tax amount at issue is small relative to the professional fees required to fight it, a negotiated settlement at the objection stage may be more practical than litigation. A tax professional can help you weigh the economics.