This recent tax court case is one that we keep seeing, taxpayers getting assessed and not filing a notice of objection within the statutory time limit or requesting an extension to object. From what I keep hearing, people get into these predicaments for the most part because they believe dealing with it will be too complicated and hope it will go away (it never does). When they later try to petition the tax court saying that they never received the assessment and therefore couldn’t object, the courts have a 4 part test for determining whether that is the case (on the balance of probabilities). I’ve not yet seen a case where the appellant has prevailed.

In this particular case in respect of the denial of a New Housing Rebate, there are a couple of things that stuck out for me, that the appellant hadn’t filed an income tax return since 2003, which in itself doesn’t prove anything but certainly does cast doubt on whether they are diligent when it comes to tax matters. The second thing that stuck out for me was that they appear to have occupied the premises for more than two years, which suggests that the CRA didn’t believe that they occupied it as a primary place of residence, or not everyone who entered into the purchase and sale agreement occupied it as a primary place of residence. Either way, they had a far better opportunity to rebut the assessment had they just dealt with the matter within the statutory period. For me, that’s the lesson to be drawn, don’t delay responding to a request for information or an assessment for tax owing. It only shrinks one’s possibilities for a favourable outcome.

If you or someone has been assessed for tax owing in the last 90 days (or 90 days + 1 year in special situations), contact ZheroTax and a former CRA auditor, appeals, or rulings officer will give you an honest assessment of your chances for success at appeals and offer to take the case on contingency should they believe it’s highly likely to be winnable.