Tax objections and appeals: disputing a CRA assessment

Notice of Objection (T400A) — the 90-day deadline

When CRA issues a Notice of Assessment or Notice of Reassessment you disagree with, your first step is filing a Notice of Objection. This is the formal step that initiates the dispute process. Critically, the deadline is strict: you have 90 days from the date printed on the Notice of Assessment or Reassessment to file your objection.

Filing the Notice of Objection

File Form T400A (Notice of Objection — Income Tax Act) by:

• Submitting it online through My Account (the fastest method)
• Mailing it to the Chief of Appeals at your CRA Tax Services Office
• Having your authorized representative submit it through Represent a Client

Your Notice of Objection must state clearly:

• The tax year(s) you are objecting to
• The specific items in the assessment you disagree with
• The reasons for your objection
• Any supporting facts or documents relevant to your position

You do not need to have all your arguments fully developed at this stage — you can supplement your objection with additional submissions later. But you must file something within 90 days.

Missing the 90-day deadline

If you miss the 90-day deadline, you have an additional one-year window — so up to 1 year and 90 days from the date of the Notice of Assessment — to apply for an extension of time to file an objection. You must explain why you could not file within the original 90 days and demonstrate that you had a bona fide intention to object. CRA grants extensions when the circumstances are reasonable, but it is not automatic.

If you miss both deadlines (90 days + 1 year), you generally lose your right to object at the CRA level. You may still be able to apply to the Tax Court of Canada for an extension of time to appeal, but the window is narrow and court relief is not guaranteed.

Effect on collection

Filing a Notice of Objection generally suspends CRA's collection of the disputed amount while the objection is under review. There are exceptions — source deductions, payroll remittances, and GST/HST assessments can be collected despite a pending objection. CRA may also collect if it determines your objection was filed primarily to delay payment and you have not provided adequate security.

CRA Appeals Division review

Your objection goes to CRA's Appeals Division, which is organizationally separate from the audit function. An appeals officer — someone who was not involved in the original audit — reviews your file and reconsiders the assessment independently.

What the appeals officer does

The appeals officer reviews the audit file, your objection, and any additional documentation you provide. They may contact you or your representative to discuss the issues, request further information, or schedule a conference call to understand your position. The appeals officer has the authority to vary, vacate, or confirm the assessment — they are not simply rubber-stamping the auditor's work.

Timeline

This is where the process becomes frustrating. CRA's Appeals Division has a significant backlog. Wait times of one to three years from filing an objection to receiving a decision are common. Complex cases can take longer. During this wait, the collection of the disputed amount remains suspended (for income tax), but interest continues to accrue on any balance that is ultimately upheld.

Possible outcomes

The appeals officer may:

• Allow the objection: Agree with you fully and vary or vacate the assessment. Your return is corrected to reflect your position.
• Partially allow the objection: Agree with you on some issues but not others. The assessment is varied to reflect a middle-ground position.
• Confirm the assessment: Disagree with your position and uphold the original assessment. You then have 90 days to appeal to the Tax Court of Canada.

Negotiating with the appeals officer

The appeals process is not purely adversarial — there is room for discussion, new evidence, and negotiated outcomes. Many disputes are resolved at this stage without going to Tax Court. If you have additional documentation that was not presented during the audit, the objection stage is an important opportunity to introduce it.

Tax Court of Canada

If CRA confirms your assessment after the objection, or if you disagree with the varied assessment, you can appeal to the Tax Court of Canada. This is a specialized federal court that exclusively hears tax disputes. Tax Court judges are not CRA employees — they are independent judicial officers, and the process is a genuine adversarial court proceeding.

You have 90 days from the date of CRA's confirmation of the assessment (or the mailing of the varied assessment) to file your appeal with the Tax Court. If you have been waiting years for a CRA decision and they have not responded, you can apply to the Tax Court after 90 days have passed since you filed your objection.

Informal procedure vs. general procedure

Tax Court of Canada offers two procedures with very different cost and complexity profiles.

Informal procedure

Available when the total federal tax in dispute (not including interest and penalties) is $25,000 or less per taxation year, or when the dispute involves a loss amount of $50,000 or less. Key features:

• Designed to be accessible to self-represented taxpayers — formal rules of evidence are relaxed
• Faster hearings, often within 6–18 months of filing
• Lower legal fees if you choose to hire a lawyer
• The judge's decision is final (no appeal to the Federal Court of Appeal except on a question of law)
• No costs awards — you generally cannot recover your legal costs even if you win

General procedure

Required when the amounts in dispute exceed the informal procedure limits, or when you voluntarily elect general procedure for a smaller amount to have full appeal rights. Key features:

• Formal court proceedings with full rules of evidence, examinations for discovery, and expert witnesses
• Typically requires a tax lawyer
• Longer timeline — hearings often take 18–36 months or more to schedule after filing
• The court can award costs (legal fees) to the winning party
• Full appeal rights to the Federal Court of Appeal and Supreme Court of Canada on questions of law

Federal Court of Appeal

Decisions of the Tax Court of Canada under the general procedure can be appealed to the Federal Court of Appeal on questions of law. This court reviews whether the Tax Court judge correctly applied the law — it does not re-examine factual questions. Appeals to the Federal Court of Appeal are rare, expensive, and generally reserved for significant legal disputes involving hundreds of thousands of dollars or questions of broad tax policy. The Supreme Court of Canada may hear further appeals from the Federal Court of Appeal, but only grants leave (permission to appeal) on matters of national importance.

Costs and timelines

These are rough estimates. Actual costs depend heavily on the complexity of the issues, whether expert witnesses are required, and the experience level of the legal team.

When to settle vs. fight

Deciding whether to pursue a dispute all the way to Tax Court requires an honest assessment of several factors:

Strength of your legal position

What does the law say? Has the Tax Court ruled on similar issues before? A tax lawyer can give you a realistic probability assessment — if you have a 70% chance of winning, fighting makes more sense than if you have a 30% chance. Be wary of advisors who tell you only what you want to hear.

The economics

Compare the amount in dispute against the likely legal costs. If you are fighting over $15,000 of reassessed tax and general procedure legal fees would cost $60,000, the economics rarely make sense. Informal procedure may still be worthwhile for the same dispute at lower legal cost.

Precedent value

Occasionally, a taxpayer fights a dispute even when the economics are against them because the outcome will affect many similar transactions — for example, an industry-wide issue where winning would benefit many taxpayers facing the same position. In these situations, industry associations sometimes share litigation costs.

Certainty

Settling with CRA provides certainty — you know exactly what you owe and can move on. Litigation can drag on for years, during which interest continues to accrue and business uncertainty persists. A negotiated settlement during the objection stage or before a Tax Court hearing (CRA's litigation team is empowered to settle) is often the pragmatic outcome even when your legal position is strong.