INCOME TAX ASSESSMENTS
OBJECTIONS AND APPEALS
Robert B. Hayhoe
(416.595.8174)
CGA Ontario
Public Practitioners’ Convention
Saturday, September 23, 2000
MILLER THOMSON
LLP
REPRESENTATION
Audit
 Objection
 Tax Court
 Hiring Lawyers

MILLER THOMSON
LLP
TAX TREAMENT OF
REPRESENTATION EXPENSES
ITA s.60(o) makes objection and appeal
expenses deductible
 ITA s.56(1)(l) includes legal costs awarded
by court in income

MILLER THOMSON
LLP
WHAT IS APPEALABLE?
Assessments and determinations
 Nil assessments not appealable
 Loss Determinations
 Interest and Penalties

MILLER THOMSON
LLP
THE NOTICE OF OBJECTION
- Time Limit

For individuals and testamentary trusts, the
later of:
 90
days from mailing of notice of assessment
 one year from balance due date

For all other taxpayers:
 90

days from mailing of notice of assessment
Discretionary permission to late-file
MILLER THOMSON
LLP
THE NOTICE OF OBJECTION
- Form Of Notice And Service
T400A form suggested
 Registered mail not required but suggested
 Must be signed by individual taxpayer or
authorized representative

MILLER THOMSON
LLP
THE NOTICE OF OBJECTION
- Statement Of Facts And Reasons
Substance of the Objection
 Should set out enough facts and analysis
to support the allowance of the objection

 note
potential application of 163.2 penalties
MILLER THOMSON
LLP
THE NOTICE OF OBJECTION
- The Minister’s Response

Chief of Appeals
 appeals

officer assigned
Letters and Meetings
 limit
client contact
Tight deadlines on taxpayers
 No deadlines on CCRA

 90
day appeal to Tax Court of Canada
MILLER THOMSON
LLP
THE NOTICE OF OBJECTION
- Late Filed Notices of Objection
Discretionary application to CCRA
 Conditions for late filing:

 within
the time limit, the taxpayer either
intended to appeal or could not act
 just and equitable
 application as soon as possible (no later than
one year after ordinary deadline)

Refusal can be appealed to TCC
MILLER THOMSON
LLP
TCC PROCEDURES
Informal Procedure
General Procedure
MILLER THOMSON
LLP
GENERAL PROCEDURE




Larger cases
Only lawyers may represent taxpayers
Right of appeal to FCA
Higher costs awards
MILLER THOMSON
LLP
TCC INFORMAL PROCEDURE
- When it Applies

Appeals may be brought as Informal if any
of the following applies:
 federal
tax and penalties are less than $12,000
 loss of less than $24,000
 interest only
 tax over $12,000 or loss over $24,000 is
waived

Crown may apply to move a case up to
general procedure
MILLER THOMSON
LLP
TCC INFORMAL PROCEDURE
- Representation




Unrepresented individuals
Individuals represented by agents
Individuals represented by lawyers
Corporations represented by lawyers
MILLER THOMSON
LLP
TCC ONUS OF PROOF
Taxpayer must prove that assessment is
wrong
 Complicated rules on how to meet onus
 For Informal Procedure appeals:

 just

prove the case!
Minister bears the onus to justify penalties
or late assessment
MILLER THOMSON
LLP
POWERS OF THE TCC
Confirm assessment
 Vacate assessment
 Vary assessment
 No power to increase assessment

MILLER THOMSON
LLP
INSTITUTING A TCC APPEAL

File Notice of Appeal with TCC
 must
be received within 90 days of
confirmation
 set out facts and reasons for appeal
MILLER THOMSON
LLP
LATE FILED TCC APPEALS
May be permitted by application to TCC
 Conditions for late filing:

 within
the time limit, the taxpayer either
intended to appeal or could not act
 just and equitable
 application as soon as possible (no later than
one year after ordinary deadline)
 reasonable grounds for the appeal
MILLER THOMSON
LLP
THE CROWN’S TCC REPLY


Sets out the government position in the
appeal
Basis for settlement discussions
MILLER THOMSON
LLP
TCC EXPERT WITNESSES

An individual with special expertise who
can express an opinion to help the court
 complicated
rules on how to deal with experts
– hire a lawyer
MILLER THOMSON
LLP
SETTLING TCC APPEALS
Majority of TCC appeals settle
 Settlement must be based on facts and law
 Crown is not permitted to settle on a “sawoff” basis

 usually
possible to agree on facts to support
settlement
MILLER THOMSON
LLP
TCC DISCOVERY


There is no examination for discovery in the
Informal Procedure
Request all CCRA documents pursuant to
“Appeals Renewal Initiative”
 audit
notes and report
 appeals notes and report
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LLP
TCC INFORMAL PROCEDURE
HEARING


Set by Court or at request of parties
Formerly a backlog - now very fast
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LLP
TCC PRESENTATION ORDER

Ordinary case:
 opening
statements
 taxpayer’s evidence
 Crown evidence
 taxpayer argument
 Crown argument
 taxpayer reply

May be reversed if only issue is penalties
MILLER THOMSON
LLP
TCC INFORMAL PROCEDURE
- Judgment and Appeal



Usually judgment within 90 days
No appeal right
Right to Federal Court of Appeal judicial
review
 only
designed to correct serious and obvious
errors
MILLER THOMSON
LLP
TCC INFORMAL PROCEDURE
COSTS


CCRA success results in no costs award
Taxpayer success may result in
disbursements and legal fees
 Court
will not award fees charged by agent
MILLER THOMSON
LLP
INCOME TAX ASSESSMENTS
OBJECTIONS AND APPEALS
Robert B. Hayhoe
(416.595.8174)
CGA Ontario
Public Practitioners’ Convention
Saturday, September 23, 2000
MILLER THOMSON
LLP