In your dealings with the Canada Revenue Agency, you have the option to receive its notices by either regular mail or email, but either way, the taxman assumes you receive them unless you can prove otherwise, as one taxpayer has found out.
A recent tax case, decided in September, dealt with a taxpayer who claimed to have never received various CRA notices dealing with tax reassessments for multiple tax years. The Windsor, Ont., mail carrier at one time also owned a nail salon. That business was audited by the CRA, which ultimately sent the taxpayer notices of reassessment for his 2011, 2012, 2013, 2015 and 2016 taxation years. He didn’t file notices of objection in time to challenge those reassessments, and he also missed the deadlines to apply for extensions.
Under the Income Tax Act, the deadline for individuals to file an objection is one year from the normal filing due date or 90 days after the date printed on your notice of (re)assessment, whichever is later. Practically speaking, that means if you filed your 2022 return by the May 1, 2023, general filing deadline and you received your assessment this past summer, you have until May 1, 2024, to file an objection.
If you miss the deadline, you can still apply to the CRA for an extension within one year. That application must include the reasons you didn’t object before the deadline and should be addressed to the Chief of Appeals at an Appeals Intake Centre. You’ll need to demonstrate that you were unable to object within the time limit, you were unable to instruct someone else to act for you, you had a “bona fide intention to object,” it would be “just and equitable” to extend the deadline and that your application was made as soon as circumstances permitted. Should the CRA deny your application or if you don’t receive a response from the CRA within 90 days, you may further appeal to the Tax Court of Canada.
In the recent case, the CRA testified it sent notices of reassessment by mail on July 4, 2016, to the taxpayer for the 2011, 2012 and 2013 tax years, but he claimed he never received them. He only found out about them after retaining a tax accountant in late 2019. The accountant, who represented the taxpayer in court, filed an application on June 9, 2022, for an extension of time to object to those reassessments.
The taxpayer’s argument was that he simply did not receive the notices of reassessments. He testified that the CRA’s correspondence was “sporadic at best,” but was unable to produce any copies or records of any such correspondence. The judge wondered whether the taxpayer had received any mail from the CRA, and if he did, when. He also wondered whether he received any mail from other senders.
The judge, after confirming the taxpayer’s address on file was correct and accurate, and that he did, ultimately, object to each of the reassessments, presumed the taxpayer must have received the CRA’s notices, adding that his allegation “lacked any factual foundation, which is strange, particularly as the (taxpayer) himself is a mail carrier.”
The taxpayer’s notice of objection wasn’t filed until January 2017, well beyond the 90-day deadline to object. A week later, the CRA wrote to inform him that his notice of objection wasn’t valid as it was late. The letter went on to say he had one year from the expiration of the 90-day period to apply to the CRA for an extension of time to serve a notice of objection. While the taxpayer did, ultimately, file an application with the CRA for such an extension, he waited until May 2018 to do so, which was beyond the one-year period, which expired on Oct. 3, 2017, one year after the 90-day deadline following the July 4, 2016, reassessments.
As for the 2015 and 2016 tax years, the CRA said it sent notices of reassessment to the taxpayer via email, with the 2015 reassessment dated Jan. 6, 2021, and the 2016 reassessment dated Dec. 24, 2020. The CRA sent those notices via email because the taxpayer on March 10, 2020, authorized the CRA to do so by enrolling in the CRA’s My Account system.
Taxpayers who choose the e-mail option for their correspondence get an email notification when there’s new mail from the CRA to view in My Account and don’t receive a paper copy in the mail. Examples of CRA mail you can currently receive online include: notices of assessment and reassessment, benefit notices, adjustment notices, instalment reminders and letters asking for information and documentation for various government programs.
It’s important to remember that if you provided your email address when you filed your paper or electronic personal T1 tax return, you have automatically registered to receive email notifications from the CRA and agreed to the Agency’s terms of use in Step 1 of the guide. Included among those terms and conditions is the statement that all CRA mail available in My Account is “presumed to have been received on the date that the email notification is sent. It is your responsibility to make sure that the email address provided to the CRA is up to date.”
In our case here, the last date on which the taxpayer could have filed an application for an extension of time to object to the reassessment for his 2015 taxation year was April 6, 2022, one year after the 90-day deadline from Jan. 6, 2021. For the 2016 tax year, the deadline to file for such an extension was March 24, 2022.
The judge ruled that because the taxpayer failed to file for extension applications by their respective deadlines, the Tax Court was unable to grant the extensions requested for all five years under reassessment. Thus, the taxpayer was effectively precluded from disputing any of those reassessments.