Informal vs. General Procedure in Tax Court: Which One Applies?

Once a CRA objection doesn't resolve things and you're heading to the Tax Court of Canada, you'll hit a fork almost immediately: the Informal Procedure or the General Procedure. The two aren't just different paperwork — they involve different levels of formality, different costs, and, in some cases, different weight given to the outcome. Picking the right one (or knowing when you don't have a choice) shapes the whole appeal.

What Sets the Two Procedures Apart

The Dollar Thresholds

The Informal Procedure is available where the amount in dispute falls within these limits (as of mid-2026 — verify the current figures before relying on them, as they can be updated):

• $25,000 in federal tax and penalties in dispute, per taxation year, excluding interest — for most income tax appeals.
• $50,000 where the amount in dispute is a claimed loss (rather than tax owing).
• $50,000 for GST/HST appeals under the Excise Tax Act.

If your dispute falls within these thresholds, you can generally choose the Informal Procedure — it isn't automatically assigned. If the amount exceeds them, the General Procedure applies as a matter of course.

Why the Informal Procedure Exists

The Informal Procedure was designed to give ordinary taxpayers a realistic, lower-cost way to have a smaller dispute heard, without requiring the full formality (and expense) of a civil-style trial. Its features reflect that goal:

• Relaxed rules of evidence, meaning the judge has more flexibility in what they'll consider
• A generally faster, less document-intensive process
• The ability to represent yourself without a lawyer, though you can still retain one
• Lower financial risk if you're unsuccessful, since the General Procedure's more significant cost-award exposure doesn't apply in the same way

Why the General Procedure Exists — and Why You Might Choose It Even When You Don't Have To

The General Procedure applies automatically once the amount in dispute exceeds the Informal Procedure thresholds. But even where a taxpayer qualifies for the Informal Procedure, they can choose the General Procedure instead. Reasons to do so include:

• You want the decision to set precedent — useful if the same legal issue will recur in future years or affects a business's ongoing practices.
• The legal issue is genuinely complex and benefits from full discovery, examinations for discovery, and a more thorough evidentiary record.
• You want the option to appeal further. General Procedure decisions can be appealed to the Federal Court of Appeal on a broader range of grounds than typically apply after an Informal Procedure decision.

Choosing the Right Procedure: A Quick Checklist

• [ ] Confirm the total amount of tax and penalties actually in dispute for the tax year in question (not your total tax bill — just the disputed portion)
• [ ] Check whether the dispute involves a claimed loss, which uses a different (higher) threshold
• [ ] Consider whether the legal issue is likely to recur in future years, favouring a precedent-setting General Procedure decision
• [ ] Weigh your appetite for cost exposure — Informal Procedure limits your downside if you're unsuccessful
• [ ] Consider whether you plan to be represented by a lawyer, an accountant, an agent, or represent yourself

What Doesn't Change Between the Two Procedures

Regardless of which procedure applies, some things stay the same:

• The appeal must still be filed within the applicable deadline running from the CRA's decision (or its inaction after the statutory waiting period).
• The burden of proof generally still falls on the taxpayer for an ordinary reassessment, and on the CRA for a gross negligence penalty, in both procedures.
• The dispute is still, at its core, about whether the assessment is correct in law and on the facts.

Frequently asked questions