What Cases Does the Tax Court of Canada Hear, and What Is Off-Limits?

Many people get a notice from the CRA and wonder where a dispute actually goes. Some disagreements belong in the Tax Court of Canada. Others are handled inside the CRA, or in a different court altogether.

This article explains in plain terms what the Tax Court generally decides, what it does not, and how to tell which path your problem is on. It is general information, so confirm your own situation with a lawyer or accountant.

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

The Tax Court hears appeals from assessments

The Tax Court of Canada is where you take a tax assessment you still disagree with after the CRA has looked at it again. It is an appeal court for assessments, not the first place you complain.

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. The Minister must reconsider the assessment and then notify you in writing of the outcome.

Because the objection comes first, the Tax Court is generally not available for a problem you have never objected to. A notice of objection must be in writing and set out the reasons and all relevant facts.

Income tax and GST/HST appeals

Income tax assessments are the core of the Court's work under the Income Tax Act. GST/HST objections can also reach the Court, and the CRA treats them in a similar way, with a different waiting period if the CRA never decides.

Whether a particular type of dispute, such as employment insurance or another program, falls within the Court's reach depends on the statute involved and the facts. A lawyer can confirm this before you spend time on the wrong process.

Disputes that are not Tax Court appeals

• Refused penalty or interest relief. 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, but this is an administrative relief decision, not a Tax Court appeal.
• Challenges to how the CRA handled a relief request. If a request is refused, the CRA offers a second administrative review, and 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.
• Issues you waived. You cannot appeal an issue on which you waived in writing the right to object or appeal.
• A late notice of objection. This is dealt with first by applying to the Minister (Chief of Appeals), not by going straight to the Tax Court.

The judicial review deadline is firm in principle: an application must be made within 30 days after the decision is first communicated, though a Federal Court judge may allow a further period.

Informal or general procedure

Inside the Tax Court there are two tracks. The informal procedure is simpler and applies where the aggregate of all amounts in issue is $25,000 or less, or the loss in issue is $50,000 or less, and you elect it. It also applies where the only subject-matter is interest assessed under the Income Tax Act.

If the amounts exceed $25,000 or the loss exceeds $50,000, the Court orders the general procedure, unless you elect to limit the appeal to those amounts.

Appeals beyond the Tax Court and what to do next

A Tax Court judgment can be appealed to the Federal Court of Appeal. The notice must be filed within 30 days, not counting days in July and August, after the judgment. Informal procedure judgments can be appealed only on limited grounds such as lack of jurisdiction, breach of procedural fairness or an error of law.

• Find the date on your notice of assessment, confirmation or reassessment.
• Confirm whether you have already served a notice of objection.
• Identify whether the dispute is about tax, penalties, interest or a relief decision.
• Note every deadline and speak to a lawyer or accountant before one passes.

Frequently asked questions