- The Tax Court hears appeals from assessments after you have objected, and an informal appeal can cover an interest-only dispute.
- Asking the CRA to waive or cancel penalties or interest is an administrative relief request, not a Tax Court appeal.
- If a relief request is refused, the next court step is Federal Court judicial review, generally within 30 days.
A bill with tax, penalties and arrears interest can feel like one problem. In law it is often two: a dispute about whether the assessment is right, and a request that the CRA forgive some of the penalties or interest even if it is right.
The Tax Court of Canada and the CRA's relief process answer different questions, run on different deadlines and lead to different courts. Knowing which road you are on helps you avoid missing a deadline.
This article covers Canadian federal tax law, which applies in every province.
What the Tax Court actually decides
The Tax Court hears appeals against assessments. After you serve a notice of objection, you may appeal to the Tax Court to have the assessment vacated or varied once the Minister has confirmed the assessment or reassessed.
So the Court's job is to test the assessment. Whether a particular penalty can be vacated depends on the kind of penalty and the facts behind it, and a lawyer or accountant can confirm that for your situation.
An exception: if the Minister has not notified you of a decision, you may appeal once 90 days have passed after service of the notice of objection. For GST/HST objections the CRA states the wait is 180 days.
Interest disputes in the Tax Court
Interest can be the only thing in dispute. The informal procedure applies where the only subject-matter of the appeal is interest assessed under the Income Tax Act.
There is a limit. In an interest-only informal appeal, the Attorney General may apply to move the case to the general procedure, and the Court must grant it if the interest in issue exceeds $25,000. Interest accruing after the notice of assessment is excluded from that calculation.
Relief from penalties and interest is a separate route
The Minister may waive or cancel penalties or interest under ITA s. 220(3.1) on or before the day that is ten calendar years after the end of the taxation year. This is a CRA administrative relief decision, not a Tax Court appeal.
If the request is refused, the CRA offers a second administrative review. A taxpayer who thinks the CRA was not fair and reasonable can apply to the Federal Court for judicial review within 30 calendar days of receiving the decision.
The Federal Courts Act sets the same 30-day period after the decision is first communicated, and a Federal Court judge may allow a further period.
Which route fits which problem
| Your complaint | Route | Deadline noted |
|---|---|---|
| The assessment, including a penalty, is wrong | Objection, then Tax Court appeal | 90 days from the confirmation or reassessment notice |
| Only the interest is wrong | Informal procedure may apply | Same 90-day appeal period |
| The assessment is right but you want forgiveness | CRA relief request | Within ten calendar years after the taxation year ends |
| Relief was refused | Federal Court judicial review | 30 calendar days from the decision |
What to do next
- Separate the issues: is the amount wrong, or is it correct but unaffordable or unfair given what happened?
- Note the date on each notice, because the appeal period runs from the date of the notice of confirmation or reassessment.
- Remember the objection comes first, and for most individuals the deadline is the later of one year after the filing-due date or 90 days after the notice of assessment was sent.
- If you miss the appeal date, an extension application to the Tax Court exists but is strictly limited.
- Gather the notices, correspondence and proof of the circumstances behind any late filing or payment.
- Speak with a lawyer or accountant before choosing a route, since filing in the wrong place can cost you time.
Frequently asked questions
Can the Tax Court cancel interest because the CRA took too long?
Whether delay by the CRA changes the outcome depends on the facts, and a lawyer or accountant can confirm that for your situation. What the law does say is that waiver or cancellation of interest under s. 220(3.1) is a CRA administrative decision rather than a Tax Court appeal. A lawyer or accountant can tell you which route fits your case.
Can I appeal only the interest to the Tax Court?
An informal procedure appeal can have interest assessed under the Income Tax Act as its only subject-matter. The Attorney General may seek to move it to the general procedure if the interest in issue exceeds $25,000, not counting interest accruing after the notice of assessment.
What if the CRA refuses my relief request?
The CRA offers a second administrative review. If you think the CRA was not fair and reasonable, you can apply to the Federal Court for judicial review within 30 calendar days of receiving the decision.
How long do I have to appeal an assessment to the Tax Court?
The Court must receive your notice of appeal within 90 days of the date on the notice of confirmation or reassessment. If you miss it, you may apply for an extension, but the application must be made within one year after the 90-day period expires.
Sources
- Income Tax Act s. 169 — Justice Laws (federal)
- CRA RC4443 Appealing income tax assessments to the Tax Court of Canada — canada.ca
- CRA File an appeal to the Court - Income tax or GST/HST — canada.ca
- Income Tax Act s. 167 — Justice Laws (federal)
- Income Tax Act s. 165 — Justice Laws (federal)
- Tax Court of Canada Act s. 18(2) — Justice Laws (federal)
- Income Tax Act s. 220(3.1) — Justice Laws (federal)
- CRA After you apply (taxpayer relief) — canada.ca
Links go to official government, court and regulator pages. The law changes — confirm you are reading the current version.
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