Resolving Tax Disputes in Toronto: A Walkthrough for Beginners

 Handling tax disputes with the Canadian Revenue Agency (CRA) can be complex, especially if you’re navigating the process for the first time. While you can resolve some tax disputes with a simple adjustment request, others may require filing an appeal to the Tax Courts of Canada.

Whether you’re in Toronto, Ottawa, or other cities in Canada, arming yourself with the necessary knowledge and approach is crucial to ensuring a fair resolution. For starters, this article walks you through the tax dispute process in Canada and the importance of seeking professional help.

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Understanding Canada’s Tax Dispute Process

Understanding the Canadian tax dispute process can empower you to assert your rights if you disagree with the assessment of the CRA. Here’s the basic framework of the process:

Receiving a notice of assessment 

Canada follows a self-reporting system, requiring you to prepare, calculate, and report your tax liability. Once you file your tax return, the CRA processes the information. They will give you a notice of assessment (NOA) after several weeks, detailing the amount of income tax you owe. 

Going through a tax audit 

The CRA may request more information before or after receiving the initial NOA. They may also conduct a tax audit to acquire further insights into your tax obligations. 

After the audit, the CRA may confirm the accuracy of your tax return or disagree. If it’s the latter, they will issue an audit proposal letter. Generally, you have 30 days to respond to this letter. 

Getting notice of reassessment

Unless you convince the auditor to make changes, they will issue a notice of reassessment based on the proposed letter. The document is almost the same as the NOA, except with amended sections highlighted. It tells you how much tax you owe, plus the resulting interest and potential penalties. 

Filing a notice of objection

Suppose you believe the CRA has made an error. You have 90 days to respond and dispute the amount of the reassessment. It requires filing a notice of objection with the CRA’s Chief of Appeals. Remember, the 90-day appeal period begins on the date specified in the NOA. 

Submitting a notice of appeal

The next stage of disputing a tax reassessment is appealing to the Tax Court of Canada. This step only applies if you can’t resolve it successfully with the Appeals Officer. 

A notice of appeal outlines the pertinent facts, disputed issues, and grounds for the appeal. You must file it within 90 days of confirming the reassessment. Suppose you don’t reach a fair settlement. Both parties will appear before the Tax Court to present versions of the facts to a judge. 

A judge from the Tax Court of Canada decides the case. If you believe the judge made a mistake in their decision, you can appeal to the Federal Court of Appeal. You can further appeal to the Supreme Court of Canada if you’re still unsatisfied with the decision. 

Getting Professional Help With Tax Dispute Resolution

Knowing how the tax dispute process works is vital for a satisfactory resolution. Although navigating the steps alone or representing yourself is possible, doing so might not be the most prudent choice. 

Suppose you’re facing a tax dispute in Toronto or anywhere in Canada. Protect your rights and interests with the help of an accountant or a lawyer. Discover how they can assist you below. 

Tax accountants

The best tax accountant in Toronto can give you the most appropriate advice when making decisions related to a contentious tax issue. They can help you understand the details of your tax assessment and what steps you need to take. 

From organizing the details of your dispute to ensuring all your documentation is in order, an experienced tax accountant can help you reach your desired resolution. But remember, accountants don’t have a right to advocate on your behalf in legal matters. 

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Tax lawyers

Tax disputes may involve legal intricacies. While accountants can efficiently resolve tax disputes, they might not be qualified to give you legal tax opinions. You should consult a tax lawyer if your case needs a legally binding tax opinion. A tax lawyer understands the relevant laws and regulations. They can represent you in court and advocate for a fair outcome. 

Conclusion

The tax dispute system in Canada presents potential complexities and strict deadlines. Hence, promptly seeking the guidance of a lawyer or an accountant is advisable. Besides helping you dispute claims made by the CRA, they can assist you in tax and accounting compliance and prevent potential issues in the future.