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The best way to reduce a tax debt is to find a legal reason to dispute it. If the Canada Revenue Agency (CRA) have made an error in your assessment or based it on a decision that you disagree with, you must file a Notice of Objection to start the appeals process. A CRA Assessment is presumed to be correct and you must act quickly and within the proper channels to overturn it in order to ensure you only pay the correct amount of tax.
A Notice of Objection is likely the most important document in any tax dispute. It is how you explain to the CRA why you think they are wrong and sets out all the facts and evidence to support your case. The process to file an Objection is not difficult and you can read my free guide about How to File a Notice of Objection on the Taxpayers Advocate Wiki. All you basically need to do is send the CRA form or a letter clearly marked "Objection" to your Tax Centre and indicate why you disagree with the assessment. Your objection is then assigned to an impartial appeals officer (many months later) who decides whether to change your assessment.
The skill is in drafting a Notice of Objection that will win your case.
Many taxpayers do not realize that the burden is on them to prove that the CRA are wrong and to do this, you cannot just say that you think the CRA are wrong, you need documentary evidence and legal arguments to show why they are wrong. The best objections will use a combinations of the CRA's policies, legislation, case law and evidence to show that the decisions relied upon as the basis for the original assessment were flawed and will therefore convince the appeals agent to reverse the CRA's position. The more you can find out about the original decision and the better the evidence you can produce, the stronger your objection will be. Preparation of a strong Notice of Objection is essential for your appeal to be successful at this internal level and to avoid the expenses of having to go to Tax Court. By investing time and money at the objection stage, you can save thousands of dollars in litigation fees at a later date.
My most common appeals deal with things like disallowed expenses and deductions; arbitrary assessments; director's liability; charitable donations; denied credits and benefits; personal service business determinations and findings of unreported income through inaccurate net worth assessments or bank deposit analyses. I work with both individuals and incorporated companies and have many additional areas of expertise and issues I can help with. If you even slightly suspect that the CRA's assessment of your taxes owing is incorrect, call me so we can discuss your options. I can help you file an objection for a fixed fee of $2,750 plus HST or even act as a ghost writer or review your own draft at an even lower price.
There are strict time limits to file an objection (90 days for individuals) so you must act as soon as possible after receiving an assessment. In certain circumstances, you can apply after the 90 day period but this is at the discretion of the CRA so in all cases, it is best to file your objection early to avoid the risk of having to pay an inaccurate debt. Many taxpayers rely heavily on advice given to them by agents within the CRA and while I am sure they try to be accurate, you must keep in mind that the CRA is not bound by anything their agents tell the public and you alone are responsible for meeting deadlines and filing your returns correctly.
Some CRA appeals agents send out waivers with their decisions regarding objections that have been filed by taxpayers. If you receive one of these waivers, feel free to call me and I will tell you if I think the waiver is a fair resolution to your dispute or if there is something else you could raise with the CRA. If you decide to sign a waiver, you lose your right of appeal and so they can have very serious repercussions.
If you are not successful during the internal Objection process, the next step is to appeal to the Tax Court of Canada to have a Judge review the facts and decide who is right. Once an appeal reaches the Tax Court, the Tax Services branch of the Department of Justice will represent the CRA. In many cases, I may be able to negotiate a settlement with the Department of Justice to avoid the need to progress to appearing in the Courtroom. Tax Court appeals can be very costly and it is my aim to resolve all files before the stage where litigation is necessary. In the event you do have to go to Court, I can help you with both the General and Informal Appeals procedure and escalate your appeal through the Courts as necessary.