Before a taxpayer institutes an appeal to the Tax Court of Canada, he should assess his chances of success and be as objective as possible about it. In order to do so, the taxpayer should know the CRA’s position, what issues he’ll ask the Court to decide and what arguments he’ll put forth.
The taxpayer’s chances of success should be weighed against the time and resources appealing to the Court will consume. An appeal to the Tax Court of Canada can drag over many years, depending on the issues raised, the complexity of the case, the Court’s workload, the parties’ schedule and whether the appeal will proceed under the Informal Procedure Rules or the General Procedure Rules.
An appeal to the Tax Court of Canada is a lengthy process and one that, regrettably, consumes a lot financially and emotionally. Even if there’s the possibility that costs may be awarded to a party, the cost award will probably only compensate partially for the expenses incurred, unless the Court makes an award of costs on a solicitor and client basis. However, such awards are rarely made and are generally limited to situations involving misconduct by one of the parties.
All appeals do not have to end up in court. In fact, many appeals are settled before the court hearing.
Last updated: October 5, 2015