The Tax Court of Canada has exclusive jurisdiction to resolve various disputes involving taxes. Most disputes that appear in the Tax Court relate to income taxes or the Goods and Services Tax (GST). The Tax Court addresses 14 different Acts of Parliament. Individuals can appeal to the Tax Court on their own, but the appellate process and the legal and factual items that an appellant must prove can be confusing. Individuals and businesses may choose to have a lawyer represent them in these tax disputes. Individuals or companies considering a tax appeal may want to consult with the experienced Canadian tax attorneys at Jeremy Scott Law. Contact our team today by calling (902) 403-7201.
Notice and Timing Requirements for a Tax Appeal
Filing the initial tax appeal is a relatively straightforward process. The Canada Revenue Agency reports that taxpayers must appeal to the Tax Court of Canada within 90 days of the date on any notice of confirmation or notice of (re)assessment.
Notice of Objection
The first step in the appeal process is generally to file a Notice of Objection. However, instead of going directly to the Tax Court of Canada, the Notice of Objection will go to the Canada Revenue Agency (CRA). This is a required first step to attempt to resolve the tax dispute with the CRA first before appealing to the Tax Court. These Notice of Objection appeals are reviewed by CRA’s Appeals Officers.
Appealing to the Tax Court
Only if unable to achieve a successful resolution with the Appeals Officer will a taxpayer take their appeal to the next level, which would bring them before the Tax Court of Canada. However, if the CRA does not respond to the Notice of Objection within 90 days (or 180 days for GST disputes), the Tax Court of Canada specifies that taxpayers may appeal to it directly without a specific decision from the CRA.
What Does the Tax Court of Canada Do?
The Tax Court of Canada deals only with tax disputes. This institution has broad powers when it comes to tax disputes, but no authority to address other types of legal claims.
The Tax Court will do one of three things when it evaluates an appeal:
- Confirm or reaffirm the assessment or reassessment as issued by the CRA
- Vacate (set aside) the assessment and order the CRA to reconsider its decision and issue a reassessment
- Direct the Minister of National Revenue to reassess the taxpayer based on specific findings of fact and legal standards following a trial
The Tax Court has some discretion in applying the law to tax disputes. However, that discretion is limited to the applicable tax laws and prior rulings from controlling courts. The tax court must follow a set of general standards in evaluating all CRA decisions; it is similar to other courts in adhering to established law and precedent.
Procedures for an Appeal to the Tax Court of Canada
The Tax Court is an independent agency, which means that it is not connected to the Canada Revenue Agency. Instead, it is completely separated from all other government agencies. In fact, it only has access to the documents submitted to the Court by the parties to the tax dispute.
The Tax Court of Canada uses two general appellate processes to address disputes with the Canada Revenue Agency. These procedures vary based on the type of dispute involved and the amount of money involved.
The informal procedure has no filing fee, and if the appeal is successful, the Court can order the Minister to pay for some costs of the appeal. Taxpayers will not have to pay the Minister’s costs, regardless of whether they are successful in their appeal. Taxpayers can use the informal procedure if any of the following are true:
- The disputed tax (including penalties) is less than $25,000
- The interest and penalties are the only matter in dispute
- The disputed loss is not more than $50,000 per determination
The process itself involves a relatively simple explanation of the dispute and the reasons for the appeal. The taxpayer files the appeal by delivering it to the Registry of a Tax Court of Canada office or mailing it through regular mail. Fax filing or electronic filing may also be available. As part of the appeal, the taxpayer should include a notation that they are choosing to use the informal appeal process.
If the taxpayer does not qualify for the informal procedure, or does not want to use the informal procedure for some reason, then they must use the general procedure. Individual taxpayers can still represent themselves, but corporations must retain a lawyer for this process. Individuals might also want to engage a lawyer to help with the procedures, arguments, and other formal requirements. Consider consulting Jeremy Scott Law for more information about Tax Court and appeals.
A filing fee is required for the general procedure, and that fee varies based on the penalty in dispute or the loss contested. The fee may therefore range from $250 to $550. The Court can order either party to pay the other’s costs. The general procedure has a required form that must be filed in accordance with the Tax Court of Canada rules.
Hearings Before the Tax Court of Canada
As part of the appeal process, taxpayers will likely have a hearing or trial before Tax Court. The hearing will allow the taxpayer to present their case, which often includes providing documents and calling witnesses to testify.
Hearings Under the Informal Procedure
In the Informal Procedure, the hearing is generally scheduled within 180 days from the last date that the Reply to the Notice of Appeal must be filed. Taxpayers will usually receive a formal Notice of Hearing through the mail at least 30 days before their scheduled hearing.
Hearings Under the General Procedure
The timeline for the General Procedure can vary a great deal. The parties will generally work together to create a proposed timeline to move through the steps of the General Procedure. Once those procedures are finished, the parties will often file a joint request with the Tax Court to set a hearing date.
Get Help With Your Appeal to the Tax Court of Canada
While taxpayers can sometimes represent themselves in the Tax Court of Canada, working alone might not always be a good idea. Instead, having an experienced lawyer to represent your interests and provide guidance can be helpful. Learn more about how Jeremy Scott Law can help with the appeal process to the Tax Court by calling (902) 403-7201 to schedule a personalized consultation to discuss your case.