The first thing to do when receiving a notice of reassessment is to understand what it is about. Why have you been reassessed? For what taxation years? Did the Canada Revenue Agency (“CRA”) or Revenu Québec (“RQ”) reassess you beyond the normal reassessment period? Are there penalties involved?
If you decide to object to the reassessment, you must file a notice of objection within 90 days, stating the facts and the reasons for your objection. Include with your notice of objection a copy of relevant documents.
The notice of objection is key because it:
- preserves your right to contest a reassessment; and
- is a pre-condition for instituting an appeal before the Tax Court of Canada/Cour du Québec, if the matter cannot be resolved at the appeals stage.
CRA/RQ auditors are not lawyers by background and may have reassessed you based on invalid reasons. It is therefore a good idea to consult with a tax lawyer to see if the reassessments that were issued against you are valid. A tax lawyer will go to the actual provisions of the relevant legislation and will analyse the relevant case law to assess your legal position. Knowing with clarity what your position is early on in the process with ensure that you put forward the best case possible and don’t contradict yourself down the road.
Reaching out to a tax lawyer will save you a lot of aggravation.
