Judicial Review of CRA Decisions: Federal Court Process, Deadlines and Remedies

Judicial review allows the Federal Court to review certain decisions, actions, refusals, and delays by the Canada Revenue Agency (CRA) and the Minister of National Revenue.

Unlike a Tax Court appeal, judicial review generally does not ask the Court to determine the correct amount of tax owing. Instead, the Federal Court examines whether the administrative decision was made lawfully, reasonably, and fairly.

Judicial review can arise in matters involving taxpayer relief, the Voluntary Disclosures Program, discretionary CRA decisions, unreasonable delays, and other administrative actions.

For legal representation, visit our judicial review lawyers page.

What Is Judicial Review?

Judicial review is the process through which the Federal Court supervises federal administrative decision-makers.

Sections 18 and 18.1 of the Federal Courts Act provide the Federal Court with jurisdiction to review decisions and conduct of federal boards, commissions, and other tribunals.

In a tax context, this can include certain decisions made by the CRA or by officials exercising authority delegated by the Minister of National Revenue.

The current Federal Courts Act can be reviewed on the Justice Laws Website.

What Is the Difference Between Judicial Review and a Tax Court Appeal?

Judicial review and a Tax Court appeal are different legal proceedings.

A Tax Court appeal generally concerns whether an assessment or reassessment is legally correct.

A judicial review generally concerns the legality, reasonableness, fairness, or proper exercise of an administrative decision-making power.

For example:

A dispute over whether the CRA correctly reassessed income may proceed through an objection and Tax Court appeal;
A dispute over whether the CRA reasonably exercised discretion under a taxpayer-relief provision may proceed by judicial review; and
A challenge to an unreasonable administrative delay may also potentially involve Federal Court relief.

For information about assessment disputes, see our Tax Litigation in Canada guide.

What CRA Decisions Can Be Judicially Reviewed?

Judicial review may be available for a variety of CRA administrative decisions and conduct.

Examples can include:

Denial of taxpayer-relief requests;
Voluntary Disclosures Program decisions;
Refusals involving certain discretionary tax elections;
Administrative decisions concerning extensions or relief;
Procedural fairness issues;
Decisions made without proper consideration of relevant evidence;
Decisions based on unreasonable findings or reasoning;
Failure to exercise jurisdiction;
Unreasonable administrative delay; and
Other federal administrative decisions where judicial review jurisdiction exists.

Whether judicial review is available depends on the nature of the decision and whether another adequate statutory appeal process exists.

Are Only Discretionary CRA Decisions Subject to Judicial Review?

No.

Discretionary CRA decisions are a common subject of judicial review, but judicial review is not limited exclusively to decisions containing the word “may” or to discretionary powers.

Section 18.1 of the Federal Courts Act identifies several grounds upon which relief may be available, including situations where a federal decision-maker:

Acted without jurisdiction;
Exceeded its jurisdiction;
Refused to exercise jurisdiction;
Failed to observe procedural fairness;
Made an error of law;
Made certain erroneous factual findings;
Acted because of fraud or perjured evidence; or
Otherwise acted contrary to law.

What Is the Deadline for Judicial Review of a CRA Decision?

An application for judicial review of a federal decision generally must be commenced within 30 days after the decision was first communicated to the person directly affected.

This deadline is set out in subsection 18.1(2) of the Federal Courts Act.

The Federal Court has discretion to allow additional time, either before or after the 30-day period expires, but an extension should not be assumed.

A taxpayer considering judicial review should therefore identify the communication date immediately.

Should You Request a Second CRA Review Before Going to Federal Court?

In many CRA programs, yes.

The CRA generally recommends that taxpayers request a second administrative review before commencing judicial review where a second review process is available.

This is particularly important for taxpayer-relief decisions.

A second review is generally conducted by different CRA officials and gives the taxpayer another opportunity to explain why the original decision should be reconsidered.

If the second review is unsuccessful, judicial review may then be available.

How Does Judicial Review Work for Taxpayer Relief?

The CRA has discretionary authority to cancel or waive certain penalties and interest in appropriate circumstances.

A taxpayer who disagrees with an initial taxpayer-relief decision may generally request a second administrative review.

If the taxpayer remains dissatisfied after the second review, an application for judicial review may be made to the Federal Court.

The CRA currently states that judicial review should generally be commenced within 30 calendar days of receiving the second-review decision.

For information about the relief program itself, see our CRA Form RC4288 Taxpayer Relief guide.

For legal representation, visit our penalty and interest relief lawyers page.

Can VDP Decisions Be Judicially Reviewed?

Yes.

The CRA’s Voluntary Disclosures Program involves administrative decisions concerning whether an application qualifies for relief and what relief is available.

If a taxpayer disagrees with the CRA’s VDP decision, the CRA currently provides two possible avenues:

Request a second administrative review; or
Apply to the Federal Court for judicial review.

The CRA generally recommends seeking a second administrative review before proceeding to Federal Court.

For information about the current VDP rules, visit our Voluntary Disclosures Program lawyers page.

What Is the Standard of Review?

The applicable standard depends on the issue being reviewed.

For many administrative decisions involving the merits of the CRA’s reasoning, the Court applies a standard of reasonableness.

A reasonable decision should be justified, transparent, and intelligible and should fall within the legal and factual constraints governing the decision-maker.

The Court does not simply ask whether it would have reached the same conclusion.

What Does “Reasonableness” Mean?

Reasonableness review focuses on both the reasoning process and the outcome.

The Court may consider whether:

The decision-maker addressed the important evidence;
The reasoning is internally coherent;
The conclusion is supported by the record;
Relevant statutory requirements were considered;
Important submissions were meaningfully addressed;
The decision is consistent with the legal constraints on the decision-maker; and
The reasons adequately explain why the result was reached.

What Is Procedural Fairness?

Procedural fairness concerns whether the administrative process itself was fair.

Depending on the circumstances, fairness issues may arise where:

The taxpayer was not given a meaningful opportunity to respond;
Important evidence was ignored without explanation;
The decision-maker relied on information the taxpayer had no opportunity to address;
There was a reasonable apprehension of bias;
The decision-maker failed to follow a required procedure; or
The taxpayer was otherwise denied a fair administrative process.

Can the Federal Court Recalculate Your Taxes?

Generally, no.

The Federal Court is not a substitute for the Tax Court of Canada in disputes about the correctness of an income-tax or GST/HST assessment.

If the real issue is whether an assessment is correct, the appropriate route is usually:

Notice of Objection;
CRA Appeals; and
Tax Court of Canada.

For information about objections, see our Notice of Objection guide.

What Can the Federal Court Do on Judicial Review?

Section 18.1 of the Federal Courts Act gives the Federal Court several remedial powers.

Depending on the case, the Court may:

Declare a decision invalid or unlawful;
Quash or set aside a decision;
Refer the matter back for redetermination;
Provide directions for reconsideration;
Prohibit or restrain certain administrative conduct;
Order a federal decision-maker to perform an act it unlawfully failed or refused to perform; or
Address an unreasonable administrative delay.

Will the Federal Court Usually Make the CRA’s Decision Itself?

Usually not.

Where the Court finds that an administrative decision is unreasonable or procedurally unfair, the ordinary remedy is often to set the decision aside and send the matter back for reconsideration.

A different CRA decision-maker may then be required to reconsider the matter in accordance with the Court’s reasons and any directions contained in the judgment.

However, it is too broad to say that remitting the matter is the only remedy available to the Federal Court.

Can Judicial Review Force CRA to Make a Decision?

Potentially.

Section 18.1 expressly allows the Federal Court to order a federal decision-maker to do something it has unlawfully failed or refused to do or has unreasonably delayed in doing.

This type of relief can become relevant where a taxpayer faces an excessive administrative delay and ordinary follow-up efforts have not resolved the problem.

What Evidence Does the Federal Court Consider?

Judicial review generally focuses on the administrative record that was before the CRA decision-maker.

This makes it particularly important to submit complete and well-organized evidence during the administrative process.

Depending on the case, the record may include:

The taxpayer’s application or request;
Supporting documents;
Written submissions;
CRA correspondence;
Internal records forming part of the reviewable record;
The decision letter; and
The reasons for decision.

There are limits on introducing new evidence for the first time on judicial review, subject to recognized exceptions.

How Is a Judicial Review Application Started?

A judicial review proceeding is generally commenced by filing a Notice of Application in the Federal Court.

Federal Court Form 301 is commonly used to commence the proceeding.

The application identifies:

The decision or conduct being challenged;
The relief requested;
The grounds for review;
The statutory basis for the Court’s jurisdiction; and
The material relied upon by the applicant.

What Happens After the Application Is Filed?

A Federal Court judicial review proceeding can involve several procedural stages.

Depending on the case, these may include:

Service and filing of the Notice of Application;
Obtaining the administrative record;
Preparing affidavit evidence where appropriate;
Cross-examinations on affidavits;
Written legal arguments;
Compiling an application record;
A hearing before a Federal Court judge; and
A judgment granting or dismissing the application.

What Is the Difference Between an Appeal and Judicial Review?

An appeal generally asks a court with appellate jurisdiction to determine whether the lower decision contains a reviewable error within the statutory appeal framework.

Judicial review is supervisory.

The Federal Court examines whether the administrative decision-maker acted within its authority and whether the process and decision satisfied applicable legal standards.

This distinction is particularly important in tax matters because the Federal Court and Tax Court have different jurisdictions.

Can You Use Judicial Review Instead of Filing a Notice of Objection?

Generally, judicial review should not be used to bypass the statutory tax appeal process.

Where Parliament has created an adequate procedure for disputing an assessment through a Notice of Objection and Tax Court appeal, that process normally must be used.

A taxpayer should therefore identify whether the complaint concerns:

The correctness of a tax assessment; or
The lawfulness or reasonableness of an administrative decision.

The distinction determines which court and procedure may be appropriate.

How Our Tax Lawyers Assist With CRA Judicial Reviews

KR Law Firm represents individuals and businesses in Federal Court proceedings involving CRA decisions and related tax disputes.

Depending on the matter, our tax lawyers can assist with:

Determining whether judicial review is available;
Identifying the applicable 30-day deadline;
Assessing whether a second administrative review should be requested first;
Reviewing CRA reasons and the administrative record;
Identifying procedural fairness issues;
Preparing the Notice of Application;
Preparing affidavit and documentary evidence;
Conducting and defending cross-examinations;
Preparing written legal submissions; and
Representing taxpayers at Federal Court hearings.

Frequently Asked Questions About Judicial Review of CRA Decisions

How long do I have to judicially review a CRA decision?

The general Federal Court deadline is 30 days from when the decision was first communicated to the person directly affected, although the Court has discretion to extend the deadline.

Do I have to request a second CRA review first?

Not in every conceivable case, but the CRA generally recommends a second administrative review before judicial review where that process is available. Taxpayer-relief decisions are an important example.

Can the Federal Court cancel my CRA assessment?

Judicial review generally is not the procedure used to determine whether an ordinary tax assessment is correct. Assessment disputes generally proceed through objections and the Tax Court of Canada.

Can the Federal Court overturn a CRA discretionary decision?

The Court can quash or set aside an unlawful or unreasonable decision. The matter is often returned to the CRA for reconsideration rather than the Court making the discretionary decision itself.

Can judicial review challenge an unreasonable CRA delay?

Potentially. The Federal Courts Act allows the Court to order a federal decision-maker to perform an act it has unlawfully failed or refused to perform or has unreasonably delayed in doing.

Can a denied taxpayer-relief request be judicially reviewed?

Yes. The CRA generally provides a second administrative review first, after which a dissatisfied taxpayer may seek judicial review in Federal Court.

Can a denied VDP application be judicially reviewed?

Yes. CRA’s current VDP guidance permits a taxpayer to request a second administrative review or seek judicial review in Federal Court, and generally recommends requesting the second review first.

Speak With a Canadian Tax Judicial Review Lawyer

Judicial review proceedings involve strict deadlines, specialized Federal Court procedures, and a legal analysis that differs significantly from a Tax Court appeal.

KR Law Firm represents taxpayers in judicial reviews involving CRA decisions, taxpayer relief, Voluntary Disclosures Program matters, administrative delays, and related tax disputes.

Book a Free Consultation with one of our tax lawyers to discuss a CRA judicial review matter.

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By Kaveh Rezaei – Principal Lawyer, KR Law Firm

Disclaimer: This article provides general information only and does not constitute legal advice. Judicial review rights, deadlines, available remedies, and procedural requirements depend on the particular decision and circumstances.