Following an audit by the Canada Revenue Agency (CRA), you may receive a notice of assessment that you dispute. If you want to challenge the auditor’s findings, your first 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.
When Should You File a Notice of Objection?
You only have 90 days after the date of the notice of assessment to file your Notice of Objection. After this time your rights are lost, and it’s very difficult to get an extension. Practically speaking, if you need extra time, it’s best to file an incomplete objection on the 90th day than to wait until you have all the documentation ready. You can always file additional documents during the objection process.
CRA Actions After an Objection Filing
Once you file your objection, it’s analyzed 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, and you’re able to speak with them and explain your point of view. Once the appeals officer considers all of the elements of the file, they render a decision. If you still disagree with the decision, the next step is to file an appeal with the Tax Court of Canada.
How to Use Form T400
The CRA publishes Form T400A – Notice of Objection, which you can use to file your Notice of Objection. It’s not mandatory, but it can help simplify the process because you ensure that you include all the necessary information to create a valid objection. It’s important to indicate your full coordinates on this form, along with specific information found on the notice of assessment you’re challenging.
The form lets you state the relevant facts and reasons for your objection. If you need more space than is available on the form, you can note on the form that you’ve attached your motives as a schedule. Then you can prepare a detailed explanation of the reasons for your objection along with additional documents to prove your point.
For example, if the auditor refuses the deduction of an expense and you have a copy of the invoice from your supplier along with proof of payment, you can submit those documents with your objection. If you have elements that prove your point, submitting them as schedules to your Notice of Objection can help support your case and may improve your chances for success. If you have asked for documents but do not yet have them, such as bank statements, you can make note of that information in your motives and submit those documents when you receive them.
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