You must file a Notice of Objection to dispute an assessment issued by the Canada Revenue Agency (CRA). In Canada, this process applies under both the Income Tax Act (for income tax matters) and the Excise Tax Act (for GST/HST and certain other taxes). The T400A Notice of Objection form is used for income tax objections, while equivalent forms (e.g. GST159 for GST/HST) serve the same purpose under the Excise Tax Act. This comprehensive guide explains the purpose of these forms, when to use them, how to complete and submit an objection, common reasons for objecting, important deadlines and procedures, and practical tips to help you succeed in your objection. It is intended for a general audience seeking guidance to file a Notice of Objection in Canada.
What Is a Notice of Objection and When Should You File One?
Generally, a Notice of Objection is a formal request for the CRA to review and reconsider an assessment or reassessment. You can file an objection if you disagree with any amount of tax, interest, or penalties the CRA has assessed or reassessed. In other words, if you believe the CRA made a mistake in applying tax law or in calculating your return, or if new information could change the outcome, an objection is the way to challenge that result.
- Income Tax Act (T400A) – Under the Income Tax Act, use Form T400A, Notice of Objection – Income Tax Act for income tax disputes. This form is used to object to a Notice of Assessment issued for income tax. Common situations include receiving a reassessment that increases your taxable income or disallows deductions/credits (resulting in more tax owing). Essentially, if you disagree with the CRA’s assessment of your personal or corporate income taxes, you have the right to file an objection.
- Excise Tax Act – GST/HST (GST159) – For GST/HST (Goods and Services Tax / Harmonized Sales Tax) disputes – which fall under Part IX of the Excise Tax Act – the equivalent form is GST159, Notice of Objection (GST/HST). You would file a GST/HST objection if, for example, after a GST/HST audit the CRA assesses you additional GST/HST (perhaps due to unreported sales) or reduces your refund by denying certain input tax credits (ITCs) you claimed. In short, if you think the CRA misinterpreted your business records or applied GST/HST law incorrectly in an assessment, you can object under the Excise Tax Act. (Note: GST/HST is the most common tax under the Excise Tax Act for objections. The Excise Tax Act also covers some other taxes like excise duties and special levies – objections for those non-GST items are filed on Form E413, Notice of Objection (Excise Tax Act). The process is similar, but this guide will focus on income tax and GST/HST scenarios.)
Why file an objection? Filing a Notice of Objection is the first step in the formal dispute resolution process. When you file an objection, the CRA’s Appeals Branch will impartially review the contested assessment. This can result in the CRA vacating or adjusting the assessment if they agree with you, or confirming it if they do not.
How to File a Notice of Objection (T400A or GST159)
Filing an objection involves completing the proper form or writing a letter, providing details about the dispute, and submitting it to the CRA on time. You can file the objection online through CRA portals or by mail/fax. Below are step-by-step instructions:
1. Obtain the correct form: Download the appropriate Notice of Objection form for your situation from the CRA’s website. For income tax matters, use Form T400A – Notice of Objection (Income Tax Act. For GST/HST matters, use Form GST159 – Notice of Objection (GST/HST). (If your objection relates to another excise tax or levy outside GST/HST, use Form E413 for Excise Tax Act objections.)
2. Fill in your identification and assessment details: The form will ask for basic identification and the specifics of the assessment you’re disputing. Provide your name (or business name) and complete mailing address, and a daytime telephone number where you can be reached. Include your relevant tax account number – for example, your Social Insurance Number (SIN) for an individual income tax objection, a Business Number (BN) for a business or GST/HST objection, or a trust account number if applicable. Next, identify the assessment you are objecting to: enter the date of the Notice of Assessment (or Reassessment) and the tax year in question (for income tax). For GST/HST, reference the specific reporting period or the assessment number on the notice (GST notices often cover a quarter or year of filings, or an audit period). Essentially, you want to clearly point the CRA to the exact notice and period that you are disputing.
3. State the reasons for your objection (grounds for dispute): This is the most important part. Explain why you disagree with the assessment and what you believe the correct treatment should be. The form T400A and GST159 provide space for you to write your reasons (and you can attach additional pages if necessary). In your explanation, outline the facts and arguments in detail. Provide supporting details and reference any relevant documentation or sections of law, if known. You should attach copies of documents that support your position. Supporting documents might include receipts, invoices, contracts, bank statements, tax slips, or previously submitted forms – anything that bolsters your case.
4. Ensure the form is signed and dated: If you are filing as an individual, you sign it yourself. If it’s on behalf of a business, trust, or estate, an authorized officer or representative should sign (e.g. a company’s director or an executor of an estate). Unsigned objections may be considered invalid. If someone (like your accountant or lawyer) is preparing the objection for you, you still need to sign it or have authorized them via CRA’s representative forms.
5. Complete any additional requirements if applicable: Certain taxpayers have extra requirements for objections:
- If you are a large corporation for income tax purposes, your Notice of Objection must “reasonably describe each issue” in dispute, specify the relief sought for each issue (e.g. how much you believe your income or tax should be changed), and provide the facts and reasons for each issue. A “large corporation” is generally one with over $10 million in taxable capital employed in Canada.
- Under the Excise Tax Act, similarly, if you are a specified type of large business (called a “specified person” under GST/HST rules, generally very large GST registrants or certain financial institutions), you must include a description of each issue, the amount of relief sought for each, and the facts and reasons for each in your GST/HST objection.
6. Submit the objection to the CRA: After completing the form (and attaching any extra pages or documents), you need to send it to the CRA’s Appeals Intake for processing. There are two main submission methods:
- Electronic submission (online): This is often the fastest and most traceable method. Log in to the CRA’s secure online portal – use My Account for individuals or My Business Account for business and GST filings. In the portal, look for the option to “Register my formal dispute (Notice of Objection)”. (If you work with a tax representative, they can use the Represent a Client portal to do this on your behalf .) The online system will prompt you to select the relevant account and assessment and allow you to input your objection details (you can typically upload a PDF of a completed T400A/GST159 or just fill in the fields online). When you submit an e-objection, the system immediately confirms receipt and gives you a case number, which is proof that your objection was filed on a certain date. Keep this confirmation number for your records. You can also upload your supporting documents electronically and they will be attached to your case. If you have additional documents after filing, you can use the CRA’s “Submit Documents” online service with your case number to send them in. Filing online ensures the CRA receives your objection instantly and can start processing it sooner.
- Mail or Fax (paper submission): If you prefer or need to file by paper, you can mail or fax your completed Form T400A or GST159 (or a signed letter containing all the same information) to the CRA. Objections by mail/fax should be sent to the Chief of Appeals at the appropriate Appeals Intake Centre. There are two main intake centers: one serving Eastern Canada (NL, PEI, NS, NB, QC, ON) and one for Western Canada (MB, SK, AB, BC, Territories). If mailing, use a secure method (such as Xpresspost or registered mail) so you have proof of when you sent it, in case timing is ever in question. If faxing, keep the fax transmission confirmation.
No matter how you file, make a copy of everything for your records (including the filled form and any attachments). After filing, the CRA will typically send you an acknowledgement letter or (for online submissions) you have the case number as acknowledgement.
Deadlines to File an Objection (Limitation Periods)
It is critical to file your Notice of Objection on time, as there are strict deadlines set out in law. Missing the deadline can forfeit your right to object (though there is a possibility of extension, which we’ll discuss). Here are the deadlines under each Act:
- Income Tax Act: In general, you must file the objection within 90 days from the date the CRA sent you the Notice of Assessment or Notice of Reassessment. However, the Income Tax Act provides an extended deadline for individuals (and certain trusts called graduated rate estates). If you are an individual (not a trust) or a graduated rate estate (GRE), the time limit to object is the later of: (a) 90 days from the date of the notice of assessment, or (b) one year after your filing due date for that tax return. In practical terms, for most individuals this means you have until April 30 of the second year following the tax year, if that is later than the 90-day window. For corporations, trusts (other than GRE), and other taxpayers, the deadline is strictly 90 days from the date on the Notice of Assessment or Reassessment. There is no one-year grace period for corporations – they must object within 90 days.
- GST/HST (Excise Tax Act): The time limit to file a GST/HST objection is 90 days from the date the Notice of Assessment was sent. Unlike income tax, there is no extended one-year deadline for GST/HST. All taxpayers (businesses or individuals assessed for GST/HST) have the same 90-day window. The 90-day count starts from the date the CRA mailed the Notice of Assessment (or Reassessment). This is usually printed on the top right of the notice.
Missed the deadline?
If you fail to file your objection within the allowed time, you may request an extension of time from the CRA. You have up to one year after the original objection deadline to apply for this extension. In your application for extension (which can be done via a letter or there’s a specific form), you need to explain why you filed late and demonstrate two main things: (1) that within the original deadline you either intended to object or were prevented from objecting by circumstances beyond your control, and (2) that it would be fair for the CRA to grant the extension. You must also actually file the objection itself (or include a copy) when requesting the extension – essentially, you’re asking them to accept a late objection. The Chief of Appeals (or a delegated official) will review your request and inform you in writing if the extension is granted or denied. If granted, your objection is considered to have been filed on the date of that decision letter (and then it will proceed normally). If the CRA refuses your extension request, or if you don’t get a decision on it within 90 days, you have one more option: you can apply to the Tax Court of Canada for an order granting you the extension. The Tax Court must receive such an application within 90 days of the CRA’s refusal letter. The Court may grant the extension if you meet similar criteria. This is a complex process, so it’s far better to file the objection on time if at all possible. Mark your calendar with the deadline the moment you receive a Notice of Assessment, and don’t let it lapse.
What Happens After You File an Objection?
After you submit your Notice of Objection, the process moves to the CRA’s Appeals Division. Here’s what to expect:
- Acknowledgement and case assignment: The CRA will usually send you a letter acknowledging receipt of your objection and providing a case number (if you filed online, you got this number immediately). This case number should be referenced in any further correspondence. Your file is assigned to an Appeals Officer (sometimes called Appeals Analyst). Their role is to conduct an impartial review – they were not involved in the initial assessment and will take a fresh look at the facts and law.
- CRA Appeals Officer review: The Appeals Officer will review all information related to your case. They will look at your tax return, the auditor’s or assessing agent’s notes and workpapers, and – very importantly – the reasons you provided in your objection along with your supporting documents. The Appeals Officer may contact you (or your authorized representative) to discuss the objection. This is an opportunity for an open exchange: they might ask for clarification on certain facts, or you might provide additional explanations.
- Outcome – Reassessment, Confirmation, or Determination: After reviewing, the CRA will make a decision on your objection. There are a few possible outcomes:
- If the CRA agrees with you in full or in part, they will issue a reassessment to correct the assessment. For income tax, this comes as a Notice of Reassessment showing the adjustments (for example, reducing your income or removing a penalty, etc.). For certain matters like loss determinations or credits, they might issue a Notice of (Re)determination. Essentially, you “win” either fully or partially, and your tax liability will be adjusted accordingly. You would also receive any resulting refund, plus interest on that refund if applicable.
- If the CRA does not agree (i.e., they think the original assessment was correct), they will send you a Notice of Confirmation (for income tax) or a letter stating that the assessment is confirmed. In GST/HST cases, they may issue a letter or a Notice of Decision to the same effect. This means the original assessment stands as is.
- It’s also possible the CRA could cancel an assessment entirely if it was issued in error, but that’s effectively the same as a full reassessment to $0 for the disputed amount.
The review process can take several months to several years, depending on the complexity of the issues and the CRA’s workload. While you wait, you generally don’t need to do anything unless the CRA asks for more information. It’s a good idea, however, to respond promptly to any correspondence and keep your contact information up to date so you don’t miss their calls or letters.
- Appeal rights after an objection: If you disagree with the CRA’s decision on your objection (for example, if they confirmed the assessment or only gave partial relief and you believe it’s still wrong), you have the right to appeal to the Tax Court of Canada. Appealing to the Tax Court must generally be done within 90 days from the date the CRA’s notice of reassessment or confirmation was sent to you, under both the Income Tax Act and Excise Tax Act . The CRA’s decision letter will typically remind you of this 90-day appeal period. The Tax Court is an independent court where a judge will hear your case afresh. To appeal to Tax Court, you would prepare a Notice of Appeal document and file it with the Tax Court (which has offices and also an electronic filing system).
- If CRA delays their decision: Occasionally, the CRA might not issue a decision on an objection within a reasonable time. Tax law provides a remedy: if the CRA has not replied to your income tax objection within 90 days of you filing it,you gain the right to appeal directly to the Tax Court. and directly appeal to Tax Court. For GST/HST objections, this waiting period is 180 days with no decision, after which you can also appeal to Tax Court. In practice, most people wait longer than 90/180 days because the CRA often takes more time. But this provision is there so that CRA can’t simply stall indefinitely – you can escalate if needed. If you ever use this route, it’s wise to consult a tax lawyer.
- Beyond Tax Court: Should you go to Tax Court and receive a judgment, either side (you or the government) can appeal that judgment to the Federal Court of Appeal (within 30 days of the Tax Court’s judgment being issued). Further, a Federal Court of Appeal decision can be appealed to the Supreme Court of Canada, but only if the Supreme Court grants permission (leave to appeal). These higher court appeals usually are only pursued for significant legal issues. Most disputes are resolved at the CRA Appeals stage or at the Tax Court level. The possibility of these further appeals underscores that the objection process is part of a larger system of appeal rights that ultimately ensures an independent review of CRA’s actions.
Collection and Interest: What Happens to the Tax Owing During a Dispute?
A major concern when disputing a tax assessment is: “Do I have to pay the amount in dispute now, or can it wait?” Also, “What about interest accruing on that amount?” The rules differ between income tax and GST/HST, and there are important financial implications to understand:
- Income Tax – Collection is Usually Postponed: If you file an objection for an income tax assessment, the CRA will generally pause collection action on the amounts in dispute until the objection is resolved. This means that if you owe $5,000 according to a Notice of Reassessment and you object to the full amount, CRA will generally not require you to pay that $5,000 while your objection is being reviewed (this can often be many months). This policy is meant to prevent hardship and unnecessary collections on amounts that are under review. However, there are notable exceptions:
- Source deductions and withholdings: If the assessment relates to taxes that should have been remitted to the government (for instance, payroll deductions you withheld from employees, or GST/HST you collected from customers), the CRA is not obliged to hold off on collecting those. The rationale is that in those cases, the money was trust funds collected on behalf of the government (or supposed to be), so CRA often continues to demand payment even if you object. Similarly, if CRA has reason to believe that waiting would jeopardize their ability to collect (e.g., assets being moved or taxpayer insolvency), they can proceed with collections – this is referred to as “jeopardy” collection and is allowed by legislation.
- Tax shelter donation cases: A specific rule exists for certain charitable donation tax shelters (schemes where individuals donate and get large tax credits, often contested by CRA). In those cases, CRA will postpone collection on only 50% of the disputed amount. The other 50% of tax may be collected (or at least, they won’t refund it if already paid) until the objection/appeal is resolved. This rule was introduced to discourage participation in questionable tax shelters by ensuring participants have some skin in the game during disputes.
- Large corporations: As mentioned earlier, a large corporation (for income tax) that files an objection face collection of one-half of the disputed amount despite an objection. Many large corporations choose to pay 50% to limit arrears interest. The remaining 50% is held in abeyance (not collected) pending the outcome.
- Non-disputed amounts: If part of an assessment is not under dispute, that part should be paid. For instance, if you agree you owe $2,000 but dispute $1,000, you should pay the $2,000. Only the amounts under objection are subject to the hold on collections.
It’s worth noting that once the objection is resolved, any remaining balance that you owe (tax, interest, penalties) becomes payable. The CRA will send a collection notice and expect payment, or else they may start collection enforcement after the grace period (90 days after the decision). If you appeal to the Tax Court after an objection, the CRA will continue to hold off on collection for the amounts in dispute until the court makes its decision (or you withdraw the appeal). So the hold on collections generally extends through the end of the Tax Court process for income tax disputes. One exception: if you lose in Tax Court and decide to appeal further to higher courts, the CRA usually will start collections after the Tax Court decision – they won’t wait for appeals to Federal Court or Supreme Court, though they might accept security in lieu of payment in those cases.
- GST/HST – Amounts Assessed Are Payable (No Automatic Hold): Under the Excise Tax Act, the rules are different. When the CRA issues a GST/HST Notice of Assessment, the amount assessed is considered payable immediately, even if you file an objection. Filing a GST/HST objection does NOT automatically suspend collection action by the CRA. In fact, the law expressly allows CRA to attempt to collect the full amount while the objection or appeal is ongoing. The rationale here is that GST/HST often involves amounts businesses have charged to customers (output tax) and should have remitted, so the government treats it with urgency.
That said, the CRA has discretion to postpone collections in GST/HST cases too – the law says they “may” hold off on all or part of the amount in dispute, but it’s not guaranteed. In practice, if you communicate with CRA collections and your case is strong or under review, they might agree to hold off temporarily, but you should not assume this will happen. One concrete option you have under the law is to provide a security deposit to the CRA for the amount in dispute. If you post security acceptable to the Minister (for example, a bank letter of guarantee or a surety bond for the amount owing), then the CRA will not collect the disputed amount while the objection/appeal is in progress. The security basically substitutes for payment – it assures the CRA they will get the money if you ultimately lose but keeps the funds in your hands (or rather, with the bank) in the meantime. If the dispute is resolved in your favor, the security is released back to you. Posting security is more common for very large GST disputes or where paying the amount would cause severe cash flow issues.
For most GST/HST disputes, taxpayers either pay the amount and then fight (to stop interest – see below) or they don’t pay and risk collections. It’s a tough position. It’s important to be proactive: if you file a GST objection and cannot pay the amount, you might contact CRA Collections to discuss your case and see if they’ll hold off. Document those communications. Remember that even if CRA doesn’t actively chase the amount, interest will accrue.
- Interest during disputes: Regardless of income tax or GST/HST, one thing remains true: interest keeps ticking on any unpaid amounts. The filing of an objection does not stop interest charges on the amount in dispute. Interest is charged at the CRA’s prescribed rate (which can fluctuate quarterly) from the original due date for the tax. This means if you delay paying an amount and eventually lose the objection, you’ll have to pay all the accumulated interest as well. For income tax, because CRA usually doesn’t collect immediately, people sometimes mistakenly think interest is also frozen – it is not. The CRA explicitly states that in most cases, interest will apply to amounts owing while under objection, and if you want to avoid accruing interest, you can pay the amount (full or partial) at any time. Paying will stop further interest from accruing on the portion paid, since it’s no longer owing. If you later win your objection, any overpayment will be refunded to you with interest by the CRA. Effectively, paying the disputed amount is like parking the money with CRA to cap your interest exposure – if you win, you get it back (with some interest, though typically the CRA’s refund interest is a bit lower than the rate they charge on debts). If you lose, at least you haven’t run up a larger interest bill.
Practical Tips for a Successful Objection
Filing a Notice of Objection can be a daunting process, but a few practical strategies can help things go more smoothly and improve your chances of a favorable outcome:
- File Before Deadline: Always keep the deadlines in mind. It’s advisable to file your objection as soon as you have decided to dispute the assessment – you do not need to wait until near the deadline. Filing early gets your case in the queue sooner.
- Be Clear and Complete in Your Reasoning: Craft your objection like you’re telling the story to someone who knows nothing about your case. Use plain language and, if helpful, reference the tax rules or publications that support you. Providing a logical, well-organized argument makes it easier for the Appeals Officer to see the merit in your case. Include all relevant information and documents at the outset if possible – missing info can delay the review because the officer may have to come back to you with questions.
- Attach a Copy of the Assessment Notice: When you mail a paper objection or write an objection letter, it’s very helpful to attach a copy of the Notice of Assessment/Reassessment you’re disputing. This clearly identifies the assessment number and date, and it helps ensure CRA’s Appeals knows exactly what you’re referring to.
- Use the CRA Online Services for Efficiency: If you’re comfortable with it, filing your objection through My Account / My Business Account is generally faster and more reliable than mail. You get immediate confirmation and a case/reference number, which is peace of mind. You also can upload documents directly to support your case, which gets them into the CRA’s hands instantly. This can shave weeks off the process (no postal mail delays, no risk of lost mail). Additionally, you can log in later to check the status of your objection or see if the CRA has sent you any secure messages about it.
- Consider Paying Amounts to Reduce Interest (Especially for GST/HST): As discussed, interest will accumulate on unpaid balances during the dispute. If you have the financial ability, you might choose to pay the portion of the assessment in dispute to stop interest charges. This is more common in GST/HST cases due to the lack of collection hold – many businesses pay the amount to avoid collection or high interest, then pursue the objection to hopefully recover the money. For income tax, since collection is usually on hold, some individuals opt not to pay right away; but if the amount is large and the interest could be significant, you can pay it to halt interest and request a refund later if you win.
- Keep Documentation and Proof: Maintain a file with copies of everything related to the objection: the objection form/letter you sent, the courier or fax confirmation, the CRA acknowledgment letter, and any letters or notes of calls with the CRA. This will help if any issue arises about what was communicated or if you need to reference something later (for example, if you appeal to court, you’ll want a record of what transpired). Good record-keeping is part of being a diligent taxpayer and can save headaches down the road.
- Seek Professional Advice if Needed: If the amounts are large or the issues are legally complex, you might consider consulting a tax professional (like a tax lawyer). They can help frame the arguments in the most persuasive way and ensure you’re not missing any relief you could claim. Also, if your objection advances to an appeal in Tax Court, professional representation is recommended.
- Be Patient but Persistent: Finally, understand that tax objections can take time. The CRA deals with a high volume of disputes (for example, objections related to certain large issues or backlogs can slow things down). While you wait, interest issues aside, your case is essentially in limbo. It’s okay to follow up periodically, but also know that an objection for, say, a complex business audit might easily take a year or more to get a resolution. If an unreasonable amount of time has passed, you could escalate by appealing to Tax Court on the basis of delay (as noted, 90 or 180 days with no response gives you that right).
By following these tips – filing promptly, presenting a clear case with full support, and understanding the process – you greatly improve your chances of a successful outcome or at least a smoother experience. The Notice of Objection is a powerful tool for taxpayers to ensure they are taxed fairly according to the law, and when used effectively, it is an essential part of Canada’s tax dispute resolution system that can address many issues without needing to resort to the courts.
