What is the difference between Tax Court general procedure and the informal procedure?
The Tax Court of Canada hears appeals from CRA assessments. It offers two procedures, and the one that applies depends primarily on the amount in dispute.
The informal procedure is available when the federal income tax in dispute (excluding interest and penalties) for any one appeal is $25,000 or less, or when the loss being disputed is $50,000 or less. The informal procedure is faster, less formal, and does not require the same level of legal documentation. You can represent yourself without a lawyer, the rules of evidence are relaxed, and the court aims to keep the process accessible. However, decisions under the informal procedure do not create binding precedents.
The general procedure applies when the amounts exceed those thresholds or when you elect it. It follows standard court rules — discoveries, motions, examinations under oath — and typically requires legal representation for anything but the simplest cases. Decisions under the general procedure can be appealed to the Federal Court of Appeal.
For most individuals disputing a reassessment of modest size, the informal procedure is the appropriate and more accessible route. For business disputes, large reassessments, or cases involving significant legal issues, the general procedure with legal counsel is usually necessary.
Key takeaways
- Informal procedure applies when disputed income tax is $25,000 or less (or loss $50,000 or less).
- Informal procedure is faster, less formal, and self-representation is practical.
- General procedure applies to larger amounts and follows full court rules.
- General procedure decisions can be appealed to the Federal Court of Appeal.