Time Limit for Filing Notice of Objection to CRA Tax Assessment
A taxpayer has 90 days from the date of mailing of the CRA Income Tax Assessment in which to file a Notice of Objection, as set out in paragraph 165(1)(a) of the Canadian Income Tax Act. If that 90 day limitation period is missed, paragraph 166.1(7)(a) of the Tax Act provides that an application to the Canada Revenue Agency to extend the time for serving a notice of objection to the CRA tax assessment must be made within one year after the expiration of the 90 day time limit for serving a notice of objection. So there is a 15 month window in which an objection might be filed, with consent of CRA. If that 15 month limitation period is missed subsection 166.2(1) of the Income Tax Act permits an application to be brought to the Tax Court of Canada extending the time for serving a Notice of Objection.
CRA Requirement to send Notice of Tax Assessment
Subparagraph 165(1)(a)(ii) of the Tax Act only requires, in essence, that a CRA notice of assessment be sent. It does not require that it be received. However, where a taxpayer alleges that a CRA notice of assessment or reassessment was not mailed or otherwise communicated to him, the Canada Revenue Agency bears the burden of proving that the notice was mailed or otherwise communicated to the taxpayer. Our Canadian litigation tax lawyers have been successful in the past in extending this 15 month period by proving that CRA did not send a CRA notice of assessment to the correct address of our client. This is also a principle invoked by the Tax Court of Canada.
Facts Pilgrim v The Queen
In the case of Pilgrim v The Queen 2015 TCC 302 released in December 2015 this rule was applied by the Tax Court of Canada to find in favour of the taxpayer. Mr. Pilgrim applied for an Order under subsection 166.2(1) extending the time for serving a Notice of Objection in respect of the CRA income tax assessments for the 2009, 2010 and 2011 taxation years. The issue in the application is whether the CRA Notices of Assessment were mailed to Mr. Pilgrim's correct address. Mr. Pilgrim testified that he did not receive the Notices of Assessment and that he first learned of the tax reassessments in late May or early June of 2014, when he received his CRA Notice of Assessment for the 2012 taxation year, which had been mailed to him on May 15, 2014. The 2012 CRA Assessment Notice indicated that a substantial outstanding income tax balance was owed by him in respect of taxation years preceding 2012. The address to which the CRA had mailed the Notices of Assessment was not the complete address of Mr. Pilgrim as the unit number was lacking. He lived in a large residential development.
Legal Analysis Pilgrim v The Queen
The Federal Court of Appeal has held in the case of 236130 British Columbia Ltd. v The Queen, 2006 FCA 352, at paragraph 20 that the fact that a CRA notice of reassessment was sent to a wrong address leads to the conclusion that the reassessment was not issued at all. The trial judge in this case found that the CRA did not send the Notices of Assessment to Mr. Pilgrim. Therefore, the limitation period contemplated by subparagraph 165(1)(a)(ii) of the Income Tax Act did not begin to run, with the result that Mr. Pilgrim's Notice of Objection was served on the Minister within the time limited by paragraph 165(1)(a) of the Tax Act. In other words his Notice of Objection was filed in time.
Canadian Litigation Income Tax Lawyer Case Comment Pilgrim v The Queen
This case is a very clear application of the rule, set out above, that CRA must send a Notice of Assessment to the correct address of the taxpayer. That address must furthermore be complete with unit number for multiple dwelling unit complexes. It is usually necessary to fight CRA very hard in these types of circumstances to prove that the CRA Notice of Assessment was not sent to the correct address and not received by the taxpayer. As indicated above, our Canadian litigation income tax lawyers have successfully made this argument with CRA in the past.