Following an audit by the Canada Revenue Agency, you may receive a notice of assessment that you do not agree with. If you want to challenge the auditor’s findings, the next step is to file a notice of objection. Here is what you need to know to give yourself the best chance at a successful outcome.
The Objection Procedure
You only have 90 days to file your notice of objection after the date of the notice of assessment. Once that delay expires, your rights are lost, and it is very difficult to get an extension. Practically speaking, it is best to file an incomplete objection on the 90th day than to wait until you have all of the documentation ready. You can always add further documents during the objection process.
Once your objection is filed, it will be analysed by a CRA appeals officer who is independent of the auditor who issued the notice of assessment. The appeals officer reviews the auditor’s file as well as your arguments. You will be able to speak with him or her and explain your point of view. Once the appeals officer considers all of the elements of the file, he or she will render a decision. If you still disagree with the decision, the next step is to file an appeal with the Tax Court of Canada.
What to Include in Your Notice of Objection
While it is not mandatory for the process, the CRA publishes Form T400A – Notice of Objection, which you can use to file your notice of objection. The advantage of using this form is if you fill it out completely, you will be certain to have provided all of the necessary information for your objection to be valid. You need to indicate your full coordinates along with certain information found on the notice of assessment you are challenging.
There is a space on the form where you can state the relevant facts and reasons for your objection, but unless your case is a very simple one, it will probably be insufficient. In that case, simply indicate in the space provided that your motives are attached as a schedule. You can then prepare a detailed explanation of the reasons for your objection and also file additional documents to prove your point.
For example, if the auditor refused the deduction of an expense and you have obtained a copy of the invoice from your supplier along with proof of payment, you can submit those documents with your objection. There is no reason, at this stage, to hold back documentation. If you have elements that prove your point, submit them as schedules to your notice of objection. If you have asked for documents but do not yet have them, such as bank statements, then you should say so in your motives and submit those documents upon receiving them.