Can I File An Income Tax Objection?
If you feel as though the CRA has not interpreted the law correctly in their tax audit, it is within your rights to challenge it through the Income Tax Objection process. An objection of an audit can be filed either online at your ‘My Account’ portal on the CRA website, or by mail. There are three levels of complexity objections, ranging from low (individual tax credits, Disability Tax Credit), medium (business expenses), to high (international business transactions). A tax lawyer will be able to assess the validity of your objection and ensure you follow through with it correctly, no matter what category of objection you fall under.
You must be careful to follow the guidelines for each specific tax bracket, as the procedure is different for an individual or business account. For example, an individual or a corporation can file an objection on whichever date is later: one year following the deadline of the tax return itself, or 90 days following the Notice of Assessment being sent.
It is also imperative that your objection is specific. Provide clear details about what part of your tax return has been interpreted incorrectly in the audit, as well as documents to support your claim. You might, for example, claim that the expenses the CRA disallowed were actually legitimate expenses and should thus not be taxed. In any case, the documents must show conclusively that you were either guilty of an honest mistake or the CRA simply miss-understood your financial movements as a violation of Canadian tax law. A firm grounding in either of these camps is usually enough to convince the CRA that you were in the wrong – but a tax lawyer is needed to get you there.
This article provides information of a general nature only. It does not provide legal advice nor can it or should it be relied upon. All tax situations are specific to their facts and will differ from the situations in this article. If you have specific legal questions you should consult a lawyer.