Taxpayer claims he didn’t get CRA notices in mail, but court disagrees



Jamie Golombek: CRA assumes you obtain its correspondence until you may show in any other case, as one taxpayer — a mail service — discovered

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In your dealings with the Canada Revenue Agency, you’ve the choice to obtain its notices by both common mail or e mail, however both manner, the taxman assumes you obtain them until you may show in any other case, as one taxpayer has discovered.

A latest tax case, determined in September, handled a taxpayer who claimed to have by no means acquired varied CRA notices coping with tax reassessments for a number of tax years. The Windsor, Ont., mail service at one time additionally owned a nail salon. That enterprise was audited by the CRA, which finally despatched 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 problem these reassessments, and he additionally missed the deadlines to use for extensions.

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Beneath the Revenue Tax Act, the deadline for people to file an objection is one 12 months from the traditional submitting due date or 90 days after the date printed in your discover of (re)evaluation, whichever is later. Virtually talking, meaning in case you filed your 2022 return by the Might 1, 2023, common submitting deadline and also you acquired your evaluation this previous summer season, you’ve till Might 1, 2024, to file an objection.

If you happen to miss the deadline, you may nonetheless apply to the CRA for an extension inside one 12 months. That software should embrace the explanations you didn’t object earlier than the deadline and ought to be addressed to the Chief of Appeals at an Appeals Intake Centre. You’ll must display that you just have been unable to object throughout the time restrict, you have been unable to instruct another person to behave for you, you had a “bona fide intention to object,” it will be “simply and equitable” to increase the deadline and that your software was made as quickly as circumstances permitted. Ought to the CRA deny your software or in case you don’t obtain a response from the CRA inside 90 days, you could additional enchantment to the Tax Courtroom of Canada.

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Within the latest case, the CRA testified it despatched notices of reassessment by mail on July 4, 2016, to the taxpayer for the 2011, 2012 and 2013 tax years, however he claimed he by no means acquired them. He solely discovered about them after retaining a tax accountant in late 2019. The accountant, who represented the taxpayer in courtroom, filed an software on June 9, 2022, for an extension of time to object to these reassessments.

The taxpayer’s argument was that he merely didn’t obtain the notices of reassessments. He testified that the CRA’s correspondence was “sporadic at finest,” however was unable to provide any copies or information of any such correspondence. The choose questioned whether or not the taxpayer had acquired any mail from the CRA, and if he did, when. He additionally questioned whether or not he acquired any mail from different senders.

The choose, after confirming the taxpayer’s handle on file was appropriate and correct, and that he did, finally, object to every of the reassessments, presumed the taxpayer should have acquired the CRA’s notices, including that his allegation “lacked any factual basis, which is unusual, notably because the (taxpayer) himself is a mail service.”

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The taxpayer’s discover of objection wasn’t filed till January 2017, properly past the 90-day deadline to object. Per week later, the CRA wrote to tell him that his discover of objection wasn’t legitimate because it was late. The letter went on to say he had one 12 months from the expiration of the 90-day interval to use to the CRA for an extension of time to serve a discover of objection. Whereas the taxpayer did, finally, file an software with the CRA for such an extension, he waited till Might 2018 to take action, which was past the one-year interval, which expired on Oct. 3, 2017, one 12 months after the 90-day deadline following the July 4, 2016, reassessments.

As for the 2015 and 2016 tax years, the CRA mentioned it despatched notices of reassessment to the taxpayer through e mail, with the 2015 reassessment dated Jan. 6, 2021, and the 2016 reassessment dated Dec. 24, 2020. The CRA despatched these notices through e mail as a result of the taxpayer on March 10, 2020, approved the CRA to take action by enrolling within the CRA’s My Account system.

Taxpayers who select the e-mail choice for his or her correspondence get an e mail notification when there’s new mail from the CRA to view in My Account and don’t obtain a paper copy within the mail. Examples of CRA mail you may at the moment obtain on-line embrace: notices of evaluation and reassessment, profit notices, adjustment notices, instalment reminders and letters asking for info and documentation for varied authorities packages.

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It’s vital to keep in mind that in case you supplied your e mail handle if you filed your paper or digital private T1 tax return, you’ve robotically registered to obtain e mail notifications from the CRA and agreed to the Company’s terms of use in Step 1 of the guide. Included amongst these phrases and situations is the assertion that each one CRA mail accessible in My Account is “presumed to have been acquired on the date that the e-mail notification is distributed. It’s your duty to make it possible for the e-mail handle supplied to the CRA is updated.”

In our case right here, the final date on which the taxpayer might have filed an software for an extension of time to object to the reassessment for his 2015 taxation 12 months was April 6, 2022, one 12 months after the 90-day deadline from Jan. 6, 2021. For the 2016 tax 12 months, the deadline to file for such an extension was March 24, 2022.

Associated Tales

The choose dominated that as a result of the taxpayer did not file for extension purposes by their respective deadlines, the Tax Courtroom was unable to grant the extensions requested for all 5 years below reassessment. Thus, the taxpayer was successfully precluded from disputing any of these reassessments.

Jamie Golombek, CPA, CA, CFP, CLU, TEP, is the managing director, Tax & Property Planning with CIBC Non-public Wealth in Toronto.

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