Pay attention to tax deadlines - all of them!

National Post

2010-05-15



Over the next few weeks, millions of Canadians who met the April 30 tax-filing deadline will receive their notices of assessment.

Unless there was a major error with your return, chances are good that your notice was electronically generated and will state that you were "assessed as filed."

It does not mean that the CRA has completed a full review of your return and, therefore, has agreed with every deduction, donation slip or business expense claimed.

The CRA has three years from the date on the notice of assessment to request more information or perform a full-blown audit and reassess your return. (I've already been asked for my home renovation receipts!)

If you disagree with the CRA's assessment, you can try to resolve the issue informally by discussing it with your local tax services office. But if you cannot resolve the matter this way, you can take the more formal route of filing a notice of objection, which must be in writing and must clearly set out the reasons why you are objecting.

Pay careful attention, however, to the deadline for filing such an objection, which is one year from your normal filing due date or 90 days after the date printed on your notice of assessment, whichever is later.

A tax case decided late last month involved Leanne Leeman's reassessments for the 2003, 2004 and 2005 taxation years. The issue concerned the income inclusion of a tuition benefit paid to her by her employer.

The CRA brought a motion in tax court to dismiss the case outright, arguing that Ms. Leeman didn't file timely notices of objection for the tax years in question and thus, under the Income Tax Act, was precluded from taking the matter to tax court.

Ms. Leeman testified that among various correspondence she had with the CRA was a notice of objection for 2005, filed on a form she obtained on the CRA's website, which she attached to her 2006 tax return and filed by the April 30, 2007, deadline.

The CRA, which has the burden of proof in establishing that such a notice was not served, relied on the affidavit of a CRA litigation officer, who was not available to be cross-examined at the trial, despite having been made aware that Ms. Leeman was taking the position that an objection had been filed on time.

The judge ruled that since the burden of proof had not been established by the CRA concerning her 2005 objection, that it was properly filed on time.

As to the other years, however, the judge concluded that since objections were not filed on time, it was too late to appeal the reassessments for those years.

Lessons learned? If you are objecting, it's probably wise to send your notice either by registered mail or courier to ensure you have proof of delivery. Secondly, pay attention to the deadlines and don't be late.