Given the tight timelines under the Excise Tax Act (“ETA”) it is not uncommon for tax appeal deadlines to seemingly come and go. Fortunately, sometimes even when it appears that a deadline has been missed an extension may be granted or it may not have actually expired due to procedural missteps by the Canada Revenue Agency (“CRA”).

The first step to challenging a CRA Notice of (Re)Assessment is to file a Notice of Objection (“Objection”). Subsection 301(1.1) of the ETA stipulates that an Objection and all relevant facts must be filed with the Minister of National Revenue (the “Minister”) within 90 days of a Notice of (Re)Assessment being sent.  The date of receipt has absolutely no bearing on the calculation. In fact, the Federal Court of Appeal in The Queen v. Shafer, 2000 DTC 6542 confirmed that there is actually no requirement that a taxpayer ever receive the Notice of (Re)Assessment!

If the registrant is a “Specified Person” (as defined in subsection 301(1)) subsection 301(1.2) of the ETA outlines specific content requirements for an Objection that must be met. Failing to meet these requirements can limit or seriously hamper a registrant’s right of appeal to the Tax Court of Canada (“TCC”). 

Under section 306, once an Objection has been filed with the Minister a Notice of Appeal (“Appeal”) can be filed with the TCC after either:

1. the Minister has confirmed the assessment or has reassessed, or
2. 180 days have elapsed after the filing of the Objection and the Minister has not notified the taxpayer that the Minister has vacated or confirmed the assessment or has reassessed.

If the Minister has confirmed the assessment or reassessed, the Appeal must be filed with the TCC within 90 days after the notice of the Minister’s decision was sent to the registrant.

Where a registrant has missed either the deadline for filing an Objection to a Notice of (Re)Assessment, or a notice responding to an Objection or an Appeal, it may be possible to request an extension of time within one year of the general 90 day deadline expiring.  However, extensions are not automatic, and there are specific requirements set out in the ETA that need to be satisfied before an extension will be granted.

There are three relevant ETA sections when dealing with tax appeal extensions. If a registrant misses the deadline for filing an Objection, an extension can be sought from the Minister under section 303. If the Minister refuses to grant the extension or 90 days have elapsed without an answer, an extension can be sought from the TCC under section 304. Finally, if the time for filing an Appeal has expired a registrant can apply to the TCC for an extension under section 305. No extension can be granted if not sought within one year of the general deadline expiring.

In rare situations, where exceptional facts are involved, tax lawyers can sometimes successfully argue that a deadline has not actually expired due to procedural missteps by the CRA.

For example, in Titouah c. La Reine, 2017 CCI 105 (“Titouah”) the Minister rendered a decision on an Objection upholding an assessment for un-remitted GST against the Appellant as the director of a bankrupt company. The Minister’s decision was sent to the Appellant by courier and a signed courier slip confirmed that it was received by the Appellant’s wife shortly after the decision was rendered. The Appellant subsequently filed an Appeal, but did not do so within 90 days of the decision being sent by courier.

The Minister challenged the Appeal on the basis that it was filed outside the filing deadline. However, the TCC found that the Appeal was not actually filed late. In particular, the TCC held that because the Minister’s decision was sent by courier, not “registered or certified mail” as required by subsection 301(5), the 90 day filing deadline had never actually started to run.

Technical arguments such those that were made in Titouah are rarely available to taxpayers and extension requests are frequently denied. As such, we strongly recommend that registrants file an Objection or Appeal within the 90 day deadline.  However, if a tax appeal deadline is missed, a tax lawyer should be contacted immediately, because time is of the essence when seeking an extension or challenging a deadline.

A version of this article appeared in the January 2018 issue of he Canadian Tax Foundation’s Tax for Owner-Manager.

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