Tax Court of Canada – Procedure & Process Guide
The Tax Court of Canada serves as an independent judicial body that handles tax-related cases, primarily disputes between taxpayers and the Canada Revenue Agency (CRA).
Filing an Appeal
When a taxpayer disputes a CRA decision, the first step typically involves filing a Notice of Objection. However, if the CRA’s response time proves unsatisfactory or the taxpayer finds their decision unacceptable, the taxpayer can choose to escalate the matter to the Tax Court of Canada by filing a Notice of Appeal.
Throughout this process, the Department of Justice (DOJ) assumes the role of the CRA’s legal representative. From the date of the Notice of Appeal filing, the DOJ has a 60-day window to submit their counter-argument, known as a Reply.
Procedures at the Tax Court
The Tax Court of Canada offers two distinct procedures: the Informal Procedure and the General Procedure. The selection must be explicitly mentioned in the Notice of Appeal.
The Informal Procedure
The Informal Procedure caters to smaller disputes and prioritizes the reduction of the case’s duration and complexity. One notable advantage is the absence of a filing fee for the appeal.
Eligibility for the Informal Procedure hinges on the amount under dispute per year for federal tax and penalties, which must not exceed $25,000. For Goods and Services Tax (GST) disputes, the maximum allowable amount is $50,000.
The General Procedure
In contrast, the General Procedure is more formal and abides strictly by the Tax Court of Canada Rules. Deviations from these rules are permitted only with a court order. Additionally, the General Procedure involves a filing fee, which is determined by the appeal’s dollar value.
The fees are as follows:
- Class A – disputes under $50,000: $250 filing fee.
- Class B – disputes between $50,000 and $150,000: $400 filing fee.
- Class C – disputes over $150,000: $550 filing fee.
In General Procedure cases, individuals can opt for self-representation or hire an attorney. Corporations, however, are obligated to engage a legal professional.
Impact on CRA Collections Actions
Generally, filing a Notice of Appeal halts the Canada Revenue Agency’s Collections Department from accruing the tax debt until the case concludes and a verdict is reached. However, interest continues to accumulate during this period. If the appeal concerns trust funds (e.g. HST), these remain collectible. Thus, communication with CRA Collections is crucial to avoid any legal complications during Tax Court proceedings.
The Tax Court process, with its intricacies, demands meticulous attention to detail. If you intend to dispute a CRA decision, feel free to book your free consultation or contact us.
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By Kaveh Rezaei – Attorney at KR Law Firm
**Disclaimer
This article contains information of a general nature only and does not constitute legal advice. All legal matters have their own specific and unique facts and will differ from each other. If you have a specific legal question, it may be appropriate to seek the services of a lawyer.
