How to Object to a CRA Penalty Such as Gross Negligence in Canada

A notice of assessment or reassessment that includes a penalty, such as a gross negligence penalty or a late-filing penalty, can be alarming. Many people assume a penalty is final once it appears. In fact, there are two quite different ways to push back, and they work differently.

This article explains how an objection deals with penalties, how it differs from a request for relief, and what deadlines apply. Whether a particular penalty was properly applied depends on your facts, so a lawyer or accountant can help you assess it.

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

Can you object to a penalty at all?

Yes. Penalties and interest are part of the assessment, and a notice of objection can dispute them. The CRA examines a return, assesses tax, interest and penalties, and sends a notice of assessment to the person who filed it. If you disagree with the penalty, you object to the assessment that contains it.

An objection must be in writing, and it must set out the reasons for the objection and all relevant facts. For a penalty, that usually means explaining why you say the conditions for it were not met, and attaching supporting documents. What the CRA must show for a gross negligence penalty or any other penalty depends on the facts, which is a good point to get advice.

Objection versus a request for relief

These two routes are often confused. An objection says the assessment is wrong. A request for relief says the penalty or interest may be right, but should be cancelled or waived anyway. Cancelling or waiving them as a matter of fairness is a separate request, not an objection.

A reassessment issued under the Taxpayer Relief provisions cannot itself be objected to. Because the two routes work differently, some people pursue both. A lawyer or accountant can help you decide which fits your situation.

Deadlines for objecting

An individual (other than a trust) or a graduated rate estate has until the later of one year after the filing-due date for the year and 90 days after the notice of assessment was sent. Corporations and other taxpayers have 90 days after the day the notice was sent. The 90 days run from the day the notice was sent, not the day you received it.

Some assessments have only the 90-day limit, even for individuals, including loss determinations and RRSP or TFSA over-contribution assessments. If you missed the deadline, you may apply for an extension, but only if you apply within one year after the objection deadline expired.

What to include in your objection

• Your name, complete mailing address and daytime phone number.
• The notice date, the tax year, and your SIN, business number or other account number.
• The relevant facts and reasons, with copies of supporting documents.
• The representative's details, if you have one.
• A signature and date, with an authorized officer signing for a corporation or trust.

You can file online through My Account for Individuals or My Business Account by selecting "Register my formal dispute", or through an authorized representative using Represent a Client. You can also send a form or a signed letter by mail or fax to the Chief of Appeals, or deliver it in person. The CRA says portal filings reach an appeals officer sooner than paper. Form T400A was cancelled as of 2026-10-26 and replaced with Form RC592, Notice of Objection.

Paying, waiting and what to do next

Generally, you do not have to pay disputed income tax until the objection review is complete, but amounts you were required to withhold and remit must still be paid on time, and collection is not postponed for them. How this applies to a particular penalty depends on your situation, so it is worth confirming with a lawyer. Interest keeps accruing during an objection, but paying all or part of the disputed amount stops further interest on the amount paid, and it is refunded if the CRA agrees with you.

If the CRA disagrees, it sends a Notice of Confirmation or a reassessment, and you can then appeal to the Tax Court within 90 days.

• Find the notice date and work out which deadline applies to you.
• Gather the documents that explain what happened and why.
• Decide whether you are disputing the penalty, asking for fairness relief, or both.
• Talk to a lawyer or accountant before filing, especially for a serious penalty.

Frequently asked questions