Moore
March 2016 Newsletter

A new way around the deadline for filing a notice of objection?

If you disagree with an assessment or reassessment for a taxation year, the Income Tax Act requires you to file a Notice of Objection within 90 days of the date on the Notice of (Re)Assessment for the year or one year after the tax return filing-due date for the year, whichever is later. Without a valid objection, you cannot appeal to the Tax Court of Canada. The 90 days normally starts running from the day the Notice is mailed, even if it never reaches you. For taxpayers other than individuals, the objection period is simply the 90-day period after the date of Notice of (Re)Assessment.

If you miss the deadline, the Act allows you to apply for an extension of time for up to one year past the deadline. Within that one year, the CRA is fairly generous about allowing applications for extension of time. Past the one year, however, there is no way to have time extended. Your right to object or appeal is gone forever, no matter how good your excuse for missing the deadline. The Tax Court of Canada has confirmed this rule in dozens of cases.

However, there may be a new solution in meritorious cases (such as where you never received the Notice of Assessment, though no fault of your own). In late January 2016, the Federal Court issued its decision in Conocophillips Canada Resources Corp. v. Canada, 2016 FC 98 (available on canLii.org). The Court ruled that the CRA is permitted to apply subsection 220(2.1) of the Income Tax Act to extend the time to file an objection. This subsection allows the CRA to “waive the requirement” to “file a prescribed form, receipt or other document”.

Conocophillips had asked the CRA to waive the company’s obligation to file a notice of objection on time. The CRA refused, saying it had no legal power to do so because subsection 220(2.1) was not intended to apply to a Notice of Objection. Now the Federal Court has ruled that it does, leaving the CRA to make a decision as to whether to waive the requirement as a way of extending the filing deadline.

It is expected that the CRA will appeal this decision to the Federal Court of Appeal, which may well conclude that the Federal Court was wrong. (The Court of Appeal in recent years has repeatedly ruled that taxpayers cannot use the Federal Court to bypass the normal process of appealing to the Tax Court.) Until it does, however, this case offers a glimmer of hope to taxpayers who have missed the objection deadline + 1 year though no fault of their own.

Last modified on March 8, 2016 12:00 am