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How and where to litigate with the Canada Revenue agency

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The quantity and amount of tax audits and assessments have significantly increased as a result of the federal government’s large expenditures on the Canada Revenue Agency (CRA). High-net-worth individuals and organizations in Canada must also deal with complex tax laws and a fast-moving dispute resolution procedure. It’s crucial to proactively manage your contacts with tax authorities so that they offer value by preventing problems and successfully resolving them when they arise while being well aware of the applicable laws, internal government procedures, and available dispute resolution options.

What is Tax assessment?

Once a taxpayer has been assessed by the CRA, they have the right to contest the amount of tax that has been levied against them. This official name for a tax bill is called a Notice of Assessment or Tax Assessment. To contest a Tax Assessment, a taxpayer must submit a Notice of Objection within the prescribed timeframes. The taxpayer has two options after filing the Notice of Objection: either go through the CRA’s administrative procedure or directly appeal to the Tax Court of Canada (the “Tax Court”). If the CRA has not vacated, verified, or reassessed the taxpayer 90 days after the Tax Assessment is issued, the taxpayer may file a direct appeal with Tax Court. 

If a tax audit is involved, being assessed by the CRA may be a protracted, unpleasant, and challenging procedure. Most taxpayers just seek to contest the amount of tax that has been assessed, but in exceptional cases, the taxpayer could also want to bring a tort claim against CRA employees for improper actions. Due to the fact that a tort is a civil wrong rather than a criminal one, the taxpayer must file their claim in a court with civil jurisdiction.

What is the structure of the applicable tax authority “ Canada Revenue Agency”?

The CRA is the country’s top tax authority; it oversees the federal income tax, the GST/HST, as well as the programs for employment insurance and pension plans. The federal, provincial, territorial, and First Nations governments entrust the CRA with the administration of several social benefit and tax credit programs. Along with conducting audits, investigations, and tax collection, the CRA also engages in enforcement efforts.

A Commissioner, a Board of Management, and a Minister make up the CRA’s governing structure. An external auditor for the CRA is the Auditor General of Canada. Additionally, there is the Taxpayers’ Ombudsman, which is independent of the CRA. In addition to reporting to the Executive Branch, the Minister of National Revenue is accountable to the federal Parliament for the CRA. The CRA is not given any instructions by the Minister about how to apply the law in particular cases or audits. The CRA’s business strategy is the responsibility of the board of management, which also provides guidance to the Minister of National Revenue on issues pertaining to the general administration and application of the law. It is not a part of the CRA’s ongoing administration.

About 50 local tax service offices, handle a smaller amount of more expert and complex work. Moreover, call centres and four regional tax centres spread across the nation, which primarily handle a greater volume of less difficult cases and tax return processing, administer and provide the CRA’s programs.

What is the normal process and duration of the tax authority’s evaluation of a tax return?

Regardless of the kind of taxpayer or corporate organization, the Canadian self-assessment system has certain reporting requirements. The CRA can often evaluate a taxpayer’s return at any time depending on the tax at issue, but is commonly given three or four years to do so before issuing a notice of assessment, reassessment, or extra assessment of tax, interest, or penalties. In general, the time for reassessment won’t start until the initial notification of assessment is sent out. If the taxpayer made a false statement in its return that was caused by negligence, carelessness, or willful default, or if the taxpayer issued a notice of assessment, reassessment, or extra assessment, the CRA is frequently allowed to do so even after the assessment period has ended.

Claims Against the CRA

Although a lot of taxpayers believe the CRA has harmed them, most of the time, the activities of CRA workers do not amount to tortious behaviour. In reality, there hasn’t yet been a published judgment in which the CRA was held negligently accountable to a taxpayer. Taxpayers may have more luck with other tort cases, such as misbehavior in a public office. Contact our leading Canadian tax attorneys for tax assistance right away if you want to take part in any sort of dispute with the CRA.

Conclusion 

In this blog, we have addressed the important issue of how and where to litigate with the Canada Revenue Agency (CRA). Due to the federal government’s massive investments in the Canada Revenue Agency, tax audits and assessments have greatly increased. Additionally, complicated tax regulations and a prompt dispute resolution process must be dealt with by high-net-worth individuals and businesses in Canada. In order for your interactions with tax authorities to be beneficial, it’s critical to handle them proactively. The Minister of National Revenue, who is answerable to the federal Parliament, oversees the Canadian Revenue Agency (CRA). The Auditor General of Canada serves as an outside auditor for the CRA. The Taxpayers’ Ombudsman is separate from the CRA and is not involved in running it. Now you can easily litigate with the Canada Revenue Agency. 

Salman Rundhawa
Salman Rundhawa
Salman Rundhawa is the founder of Filing Taxes. Salman provides valuable tax planning, accounting, and income tax preparation services in Toronto, Mississauga, Oakville, and Hamilton.

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