“What do you mean it’s not eligible?” Disputing CRA Assessments – Part 3: Higher Authorities
Previously, we discussed the rights and responsibilities of the Claimant and CRA staff and identified 3 key resources for review and then identified the next steps to take at the Local Tax Services Office.
After exhausting those options and receiving your Notice of Assessment (NoA), if you still feel that you have not received a fair assessment, there are other steps that can be taken. This post outlines some of these steps and the commentary surrounding them.
SR&ED Appeals Process
Filing a Notice of Objection
The Guidelines for Resolving Claimants’ SR&ED Concerns document details the next steps should you be unable to resolve your disagreement at the local level.1
How & When To File A Notice of Objection
In most circumstances, the deadline to file a Notice of Objection (NoO)2 is 90 days after the date of your Notice of Assessment. Specifically, use the date printed on the assessment, and not when it is received.
There is no charge for this review, and many people with an objection do not hire a lawyer at this stage; however, a lawyer, accountant, or other professional who is experienced in dealing with the CRA will be able to help you prepare and present your position effectively.
Escalating Further: Tax Court of Canada
Appealing to the Courts (Tax Court of Canada)
If you are not satisfied with the results of filing your NoO (or have not received a response in a timely manner), you can appeal the decision to the courts (Tax Court of Canada). Decisions of the Tax Court of Canada can be further appealed to the Federal Court of Appeal. Decisions of the Federal Court of Appeal can be appealed to the Supreme Court of Canada, but only with the Supreme Court’s permission.
Remember, before the Tax Court of Canada process can begin, you will need to file your NoO. If the CRA has not responded within 90 days of the NoO being served indicating it has made a decision, you may proceed with filing an appeal.
Be Prepared To Wait
As with all things that go through the Canadian courts, it takes considerable time to go to trial and there are many steps that can help ensure an earlier resolution. Most SMEs can relate to Small Claims Court, where there is a settlement meeting presided over by a judge of the court. This is also possible in the case of SR&ED-related disputes by either (a) informally requesting the Department of Justice counsel assigned to hold one or (b) formally requesting that the Tax Court of Canada schedule a settlement conference.
As with all settlement meetings, the opposing party (in this case, the CRA) is required to attend with its counsel. Since trials cost the taxpayers a considerable amount of money, all courts – the Tax Court of Canada included – are committed to working towards a settlement outside of a trial whenever possible. Many SR&ED-related cases have been settled in this fashion.
If you are frustrated with your treatment by the Canada Revenue Agency (CRA) with regards to your SR&ED claim, just remember: you are not alone. The internet is rife with horror stories of SR&ED gone awry and unfair treatment by CRA reviewers. This must always be taken with a grain of salt, as those who are wronged often complain louder than those who have received excellent treatment at the hands of the CRA.
In short, if you are frustrated with your assessment, it’s best to speak with a professional. One of the advantages is that they have likely seen this before and know where things have gone awry.
Do you have experience filing a Notice of Objection?
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- Government of Canada. (May 30, 2016.) Guidelines for Resolving Claimants’ SR&ED Concerns. (Accessed: August 31, 2017.) Retrieved from: https://www.canada.ca/en/revenue-agency/services/scientific-research-experimental-development-tax-incentive-program/guidelines-resolving-claimants-concerns.html. ↩
- Government of Canada. (February 23, 2012.) T400A Objection – Income Tax Act. (Accessed: August 31, 2017.) Retrieved from: https://www.canada.ca/en/revenue-agency/services/forms-publications/forms/t400a.html. ↩