For individuals and business owners in Canada, handling a tax dispute could become a stressful process. Every individual should be aware of the basics of tax disputes and CRA tax appeal process.
The tax system in Canada is mostly a self reporting one. A taxpayer has the obligation to report the tax amount with transparency and with accuracy. It is expected out of each taxpaying individual at the time of filing the annual tax returns. The CRA processes these tax returns and takes a decision on the accuracy of the information that has been reported. CRA then provides the taxpayer with a tax assessment. This is the Notice of Assessment and is sent as a routine to each taxpayer some weeks after he or she files the tax returns.
The CRA has a right to request more information concerning the tax obligations. After an audit, the CRA may not agree with what has been reported on the tax returns and the auditor will have a proposal letter issued outlining the position of CRA and how the taxpayer can be reassessed. Individuals can take the help of professional tax lawyers who can give them advice about the audit process of CRA and represent them throughout this process.
The date featured on the Reassessment Notice is the beginning of the ninety day CRA tax appeal period. The proposal letter contains the information required if you want to dispute the tax amount, the interest calculated or the inclusion of penalties on account of the reassessment.
The objection in the form of a CRA tax appeal has to be sent to the Appeals Division of the Agency. The taxpayers get ninety days from the date of the Reassessment Notice to file the Objection Notice with the Chief of Appeals. This deadline is an important one and it cannot be missed. Tax lawyers assist the individuals in sending these objection notices.
In rare cases when the deadline of ninety days is missed, an extension to file late could be applied for. Time is allowed up to one year after the normal deadline. After receiving the Notice of Objection, the CRA reviews the application and decides whether the reasons supplied are in accordance with the CRA tax appeal rules.
An officer from the CRA Appeals Division is assigned to an individual?s file case. This officer could be from any CRA unit in Canada. The officer is assigned depending on the workload and may not be from the same city where you are residing. After receiving the CRA tax appeal, the officer handling that appeal has to either cancel the reassessment by vacating it or he or she may vary the reassessment. The reassessment can also be left alone by confirming it.
Specialized Tax Professionals would be able to guide the individuals on the streams that can be followed when filing a CRA tax appeal. There is a general procedure and an informal procedure. The procedure you would adopt will be based on the federal tax amount that is in dispute. Fees have to be paid for filing the Appeal Notice if it falls under the General Procedure rules. Informal Procedure is for small disputes and there is no fee required for filing.