AROUND THE COURTS
Knowing when and how to object or appeal is crucial
If you disagree with an income tax or GST/HST assessment, you must file a Notice of Objection (internal appeal within the CRA), before you can appeal to the Tax Court of Canada. If you aren’t satisfied with the CRA’s decision on your objection, you can then appeal to the Tax Court. (You can also appeal to the Tax Court after 90 days (180 days for GST/HST) with no decision from the CRA.)
For both an objection and a Tax Court appeal of a GST/HST matter, you have only 90 days to file (from the assessment date or from the date of the CRA’s decision on your objection, respectively). If you miss that deadline, an extension of time may be available for up to one year, but only if you meet certain conditions. After one year, you cannot object or appeal.
If the CRA issues new assessments while you have objections outstanding, it’s easy to get confused as to the right procedure.
In the recent case of Beima v. the Queen, Beima was assessed for GST/HST for 2006 through 2011, in three assessments. He did not object to any of them within the 90-day objection period, though he did apply within the one-year extended deadline for an extension of time to object to the last assessment (for 2010-2011). That extension was granted.
Beima was then reassessed in September 2013 for all of 2006 through 2012. He filed a Notice of Appeal of these assessments to the Tax Court. The Tax Court quashed his appeals for all years except 2010-2011, because Beima had not filed Notices of Objection for those other years.
Beima appealed to the Federal Court of Appeal, which upheld the Tax Court’s decision. One cannot appeal to the Tax Court without objecting first, and there was no mechanism available to fix Beima’s error.
Beima had misunderstood a CRA letter explaining the procedure for 2010-2011, which was that he could appeal directly to the Tax Court where he had already filed an objection and a reassessment was issued. That process is not available if one did not object in the first place, and so he could not use it for any years other than 2010-2011.
While the Court’s decision is correct, Beima is not the first taxpayer to be tripped up by the technical requirements of the objection and appeal process. Taxpayers often do not realize that the deadlines in the legislation are fixed and firm, and that missing a deadline to take a specific step often means losing appeal rights. (In this case, appealing when Beima could have objected was a fatal error.) Taxpayers who are acting for themselves in disputes with the CRA are best advised to consult at least briefly with a tax litigator, to make sure they are on the right track in their procedures.