Taxpayer claims he did not get CRA notices in mail, however court docket disagrees

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In your dealings with the Canada Income Company, you may have the choice to obtain its notices by both common mail or e-mail, however both means, the taxman assumes you obtain them except you’ll be able to 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 obtained numerous 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 in the end 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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Underneath the Earnings Tax Act, the deadline for people to file an objection is one yr from the conventional submitting due date or 90 days after the date printed in your discover of (re)evaluation, whichever is later. Virtually talking, which means in case you filed your 2022 return by the Could 1, 2023, basic submitting deadline and also you obtained your evaluation this previous summer season, you may have till Could 1, 2024, to file an objection.

In the event you miss the deadline, you’ll be able to nonetheless apply to the CRA for an extension inside one yr. That utility 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 Consumption Centre. You’ll have to exhibit 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 might be “simply and equitable” to increase the deadline and that your utility was made as quickly as circumstances permitted. Ought to the CRA deny your utility or in case you don’t obtain a response from the CRA inside 90 days, it’s possible you’ll additional enchantment to the Tax Court docket 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 obtained them. He solely discovered about them after retaining a tax accountant in late 2019. The accountant, who represented the taxpayer in court docket, filed an utility 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 greatest,” however was unable to supply any copies or data of any such correspondence. The choose puzzled whether or not the taxpayer had obtained any mail from the CRA, and if he did, when. He additionally puzzled whether or not he obtained any mail from different senders.

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

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The taxpayer’s discover of objection wasn’t filed till January 2017, nicely past the 90-day deadline to object. Every 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 yr 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, in the end, file an utility with the CRA for such an extension, he waited till Could 2018 to take action, which was past the one-year interval, which expired on Oct. 3, 2017, one yr after the 90-day deadline following the July 4, 2016, reassessments.

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

Taxpayers who select the e-mail possibility 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’ll be able to at the moment obtain on-line embrace: notices of evaluation and reassessment, profit notices, adjustment notices, instalment reminders and letters asking for data and documentation for numerous authorities packages.

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It’s necessary to do not forget that in case you supplied your e-mail tackle whenever you filed your paper or digital private T1 tax return, you may have robotically registered to obtain e-mail notifications from the CRA and agreed to the Company’s phrases of use in Step 1 of the information. Included amongst these phrases and circumstances is the assertion that each one CRA mail accessible in My Account is “presumed to have been obtained on the date that the e-mail notification is shipped. It’s your accountability to guarantee that the e-mail tackle supplied to the CRA is updated.”

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

The choose dominated that as a result of the taxpayer didn’t file for extension functions by their respective deadlines, the Tax Court docket was unable to grant the extensions requested for all 5 years beneath 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 Personal Wealth in Toronto. Jamie.Golombek@cibc.com.

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