In this recent tax court case the CRA assessed a taxpayer for nearly $250,000 that she claimed should have been accounted for on her husband’s return (no explanation for why this happened). The taxpayer filed their return on time and received a notice of assessment that did not seem to take issue with any part of the return at the time. However, approximately 8 months later the CRA issued a notice of reassessment for the amount above. Inexplicably the taxpayer did not file a notice of objection within the statutory period and instead filed a request for taxpayer relief of penalties and interest almost a year after receiving the notice of reassessment. Thus began a decade of increasingly confused communications between the taxpayer and the CRA which culminated in an appeal to the tax court that ultimately was found to be not within the jurisdiction and therefore the appeal was quashed. 

So many things went wrong in this case that it resembles a circus act more than a tax dispute, but the initial takeaway is that had the taxpayer taken immediate action and filed a notice of objection within the statutory period she would have had a fighting chance. Tax is complex and many times taxpayers just procrastinate and miss their opportunity to have their say. I don’t know why in this case the taxpayer did not properly object in time, but anytime after that date it all becomes the CRA’s discretion and no guarantee that they will hear the taxpayer’s case. $250,000 is a lot of money for most people and spending money on getting a competent tax professional on your case will help avoid these problems and the many years of heartache they cause.