What Happens After CRA Appeals Confirms Your Assessment in Canada

You filed a notice of objection, waited, and now the CRA has written to say it disagrees with you. That letter is usually a Notice of Confirmation. It is disappointing, but it is not the end of the road, and it starts a clock.

This article walks through what the notice means, the Tax Court deadline, what happens to collection, and how to think about whether to go further. It is general information, and a lawyer or accountant can look at the details of your file.

This article covers Canadian federal tax law, which applies in every province.

What the notice means

When the CRA receives a notice of objection, the Minister must reconsider the assessment and vacate, confirm, vary or reassess it, then notify you in writing. If the CRA disagrees with your objection, it sends a Notice of Confirmation or a reassessment.

A confirmation means the assessment stands as it was. A reassessment means something changed, and you can appeal that reassessment to the Tax Court of Canada without serving a new notice of objection.

The Tax Court appeal and its deadline

You can appeal to the Tax Court of Canada once the Minister has confirmed or reassessed. The appeal cannot be instituted after 90 days from the day the notice of confirmation or reassessment was sent. As with objections, the date to watch is the date the notice was sent, so check the date on the letter.

The Tax Court has Informal and General procedures. Informal appeals have no filing fee, while General Procedure appeals have a fee based on the amount in dispute, and appeals can be filed by mail, fax, delivery or the Court's electronic filing. Which procedure fits your case can depend on the amount and the issues, so this is worth confirming with a lawyer.

If the CRA never decides, you do not have to wait forever. For income tax you may appeal once 90 days have passed since the notice of objection was served with no decision. For GST/HST the wait is 180 days after the objection was filed.

What happens to the money you owe

After a notice of objection is served, the Minister cannot take collection action on the disputed amount until 90 days after the day notice of the decision confirming or varying the assessment is sent, and CRA says it normally postpones collection until then. Once you appeal to the Tax Court, collection of the disputed amount is barred until the Court's decision is mailed to you or you discontinue the appeal, whichever comes first.

Interest keeps accruing on disputed income tax during an objection. Paying all or part of the disputed amount stops further interest on the amount paid, and if the CRA agrees with you the payment is refunded.

• The collection limits do not apply to some items, including amounts that must be withheld and remitted, and certain assessments such as those under s.152(4.2), 169(3) or 220(3.1).
• Large corporations and certain tax shelter cases can be required to pay one-half of the assessed amount.
• For GST/HST, CRA says it can keep collecting while the objection is pending, and interest still applies.

If you miss the Tax Court deadline or want to go further

If you miss the 90-day Tax Court deadline, you can apply to the Court for an extension. CRA states you have one year and 90 days from the confirmation or reassessment date to apply.

A Tax Court result can be appealed further. A notice of appeal to the Federal Court of Appeal is due within 30 days of the Tax Court's final judgment, excluding July and August, and an application for leave to the Supreme Court of Canada is due within 60 days of the Federal Court of Appeal's judgment, excluding July.

If you do not appeal, the assessment generally stands. Separate requests, such as asking the CRA to cancel penalties or interest as a matter of fairness, are not objections and follow their own process. The Minister may waive or cancel penalty or interest for a year up to ten calendar years after it ends.

What to do next

• Find the date the Notice of Confirmation was sent and count 90 days from it.
• Read the notice and your original objection side by side to see what was and was not accepted.
• Decide whether to appeal, thinking about the amount, the evidence and the cost.
• Ask a lawyer or accountant about Informal versus General procedure.
• Keep your case number on every piece of correspondence.
• Plan for the possibility that interest continues to accrue unless you pay.

If the deadline is close, get advice quickly. A Tax Court appeal is a court proceeding, and a lawyer can explain what is realistic on your facts.

Frequently asked questions