A Notice of Reassessment means the CRA has reviewed a return that was already assessed and changed it – often affecting your tax owing, refund, penalties, and interest. What matters now is doing the right things in the right order – especially before the clock runs out.

Step 1: Do this today (the “don’t-miss-a-deadline” checklist)

1. Find the notice date (the date on the notice).
    This date generally drives your objection deadline. Determine your objection deadline.
2. Identify exactly what changed.
    Compare the reassessed amounts to your original filing (income, deductions, credits, penalties, interest).
3. Pull every CRA letter that led up to this.
    Reassessments often follow a review/audit where the CRA requested documents.
4. Collect your proof.
    Receipts, invoices, contracts, bank records, bookkeeping reports, slips, correspondence—anything that supports your original position.
5. Calendar the objection deadline immediately.
    Make sure that you document your objection deadline and do not miss it.

Step 2: Choose the right path (not every reassessment needs a fight)

A reassessment usually falls into one of these situations:

A) You agree with the change

Pay what’s owed (or set up a payment arrangement). Interest can keep accumulating on balances owing.

B) You disagree (facts misread or law misapplied)

That’s when a Notice of Objection is usually the next step. Objections are for situations where you believe they misinterpreted your facts or applied the law incorrectly.

Step 3: Know the deadline that matters most

Individuals (and graduated rate estates)

Your objection deadline is generally whichever is later:

• 1 year after the tax filing deadline for the return, or
• 90 days from the date of your notice of reassessment.

Corporations

Your objection deadline is generally:

• 90 days from the date of your notice of reassessment.

Missed the deadline?

You may apply for an extension, and the CRA states you can apply up to one year after the objection deadline (and you can apply at the same time as you file your objection).

Step 4: File a Notice of Objection

The CRA’s guidance is straightforward: when you object, you must clearly explain what you’re objecting to and why, and include relevant facts and supporting documentation.

What to include in a strong objection

• The tax year and the Notice of Reassessment you’re objecting to
• The specific items you disagree with (line items/issues)
• A clear explanation of why (facts + law, where relevant)
• The documents that prove your position
• A summary your reviewer can follow quickly

How to file

You can file:

• Online in CRA portals (My Account / My Business Account) using “Register my formal dispute”, and then upload documents through “Submit documents online.”
• Through your authorized representative via Represent a Client
• By mail/fax using Form T400A (Objection – Income Tax Act) or a signed letter with the facts, reasons and the same information that would go into a T400A form.

Step 5: Does interest continue to accrue while you object?

Interest charges continue to accrue while the amount is in dispute. You can pay the amount in dispute to avoid additional interest.

Step 6: What happens after you object?

Once you file, the CRA reviews what you submitted and will either:

• agree (in whole or part) and issue an adjustment/reassessment, or
• disagree and send a notice saying the reassessment/determination was correct

Step 7: If the CRA says “no,” the next step is Tax Court

If you disagree with the CRA’s decision on your objection, you can appeal to the Tax Court of Canada. Generally, you have 90 days from the CRA’s reassessment /determination following your objection to file your appeal.

How far back can the CRA go?

Under the Income Tax Act, the “normal reassessment period” is generally:

• 4 years for a mutual fund trust or a corporation that is not a CCPC, and
• 3 years in most other cases, counted from the day the CRA sent the original assessment (or the original “no tax payable” notification).

The CRA can reassess after that normal period in specific situations – such as where there was a misrepresentation attributable to neglect, carelessness, wilful default, or fraud, or where a waiver was filed.

One more option people miss: relief from penalties and interest

If your main issue is penalties and/or interest (not the underlying tax), you may be able to request taxpayer relief (discretionary, fact-driven). There’s also a 10‑year limitation period for interest relief requests (and related limits for penalties/interest outside the eligible window).

Bottom line

A CRA Notice of Reassessment isn’t the end of the road – but it is a deadline-driven process. If you believe the reassessment is incorrect, the goal is to:

• lock in your deadlines,
• build an evidence-based position, and
• file a clean, timely objection that’s easy for CRA to understand.

If you want help assessing the notice, preparing your objection, or planning next steps (including Tax Court strategy), contact Taxpayer Law today.

Tax disputes can be daunting for any business. When faced with a Canada Revenue Agency (CRA) audit or a tax reassessment, companies need a lawyer who can provide not only competent legal defense but also practical guidance through the process. A successful tax litigation (or tax dispute resolution) lawyer will protect the company’s interests, navigate complex tax laws, and strive for the best outcome – whether that means negotiating a favorable settlement or fighting a case in court. The following are key qualities and skills to look for in a strong tax disputes advocate for your business.

Legal Expertise in Canadian Tax Law

At the core, a good tax litigation lawyer must have mastery of tax law. Tax is an intricate and ever-changing field, so your lawyer should have in-depth knowledge of Canadian tax statutes, regulations, and case law. This expertise enables them to interpret complex rules and apply tax laws to your advantage. Look for a practitioner with a proven track record in resolving tax disputes – their past successes and years of focused experience are a testament to strong technical skills. Top tax litigators often have significant technical expertise, giving them insight into the nuances of corporate tax, GST/HST, international tax and more. In short, a successful tax disputes lawyer offers deep and up-to-date tax knowledge, which is critical when your business is dealing with complicated assessments or obscure provisions of the law.

Strategic Thinking and Problem-Solving

Tax controversies require not just knowledge, but also strategic savvy. Every tax dispute is unique, so a skilled lawyer will assess the specifics of your situation and develop a customized resolution strategy rather than a one-size-fits-all approach. This strategic thinking involves evaluating the strength of your legal position, anticipating the CRA’s tactics, and deciding when to negotiate or when to litigate. The best tax litigators are innovative problem-solvers who can find creative, cost-effective ways to settle issues early when possible. They will outline a clear plan – for example, whether to engage in settlement discussions, file a notice of objection, or proceed to the Tax Court – and adapt that plan as new developments arise. In high-stakes corporate tax disputes, this kind of foresight and planning can save your business time, resources, and uncertainty.

Familiarity with the CRA and Canadian Courts

Successful tax dispute lawyers know the terrain of tax enforcement and litigation. That means being thoroughly familiar with the CRA’s processes (from audits and investigations to the appeals process) as well as the procedures of the Tax Court of Canada and other courts. A seasoned tax litigator is well-versed in the rules and procedures laid out by the CRA and the Tax Court of Canada, ensuring that your case is handled in full compliance with the proper protocols. Many leading practitioners have experience dealing with CRA auditors and appeals officers on a daily basis, and some even come from backgrounds as former CRA lawyers or Tax Court clerks. This insider familiarity can be a huge asset – your lawyer will know how to navigate the CRA’s bureaucracy and anticipate common issues or delays. And if your case does end up in court, they will have the advocacy experience to present a solid defense before a judge. In short, look for counsel who regularly deals with the CRA and appears before the Tax Court, as this experience helps them handle your dispute efficiently and effectively.

Strong Negotiation Skills

In Canada, the majority of tax disputes with the CRA are resolved out of court, often through settlements or negotiated agreements. Therefore, a tax disputes lawyer must be an adept negotiator. They should be skilled in communicating with tax authorities on your behalf, addressing the issues in contention and exploring avenues for settlement. Effective negotiation can result in significant benefits – for example, your lawyer might manage to negotiate a settlement with the CRA that lessens your company’s tax liability or avoids hefty penalties. This skill requires both legal acumen and tact: a good tax lawyer will know the strengths and weaknesses of your case and use that knowledge as leverage in discussions with Department of Justice lawyers. They also understand the CRA’s perspective and constraints, which helps  finding a middle ground where possible. By choosing a lawyer with strong negotiation skills, you increase the likelihood of a faster, mutually acceptable resolution that spares your business the uncertainty of a trial.

Industry-Specific Knowledge and Business Acumen

Tax issues do not exist in a vacuum – they are intertwined with the business activities and industry context of the taxpayer. A successful tax litigation lawyer for a corporation will take the time to understand your company’s industry, business model, and objectives. Familiarity with the specific sector (be it technology, real estate, finance, manufacturing, etc.) allows the lawyer to anticipate unique tax challenges and craft arguments that make sense in your business context. Importantly, an effective advocate sees the bigger picture beyond just legal rules. In practice, this means your tax lawyer should recognize what a dispute means for your operations, finances, and stakeholders. They might, for example, know how a potential tax settlement could impact your financial statements or industry reputation. This blend of tax knowledge and business acumen ensures that the advice you get is practical and aligned with your corporate goals.

Effective Communication with Corporate Stakeholders

Tax law is full of technical jargon and arcane concepts, so a lawyer’s ability to communicate clearly is paramount. The ideal tax dispute lawyer can distill complex tax and legal issues into plain language for their clients. They will explain complicated tax concepts in a way that you and your team can understand, and they remain responsive to questions and concerns throughout the process. This communication skill is important not only for the day-to-day lawyer-client relationship, but also for keeping all corporate stakeholders informed. For instance, the lawyer should be comfortable briefing your company’s executives or board members on the status of a case and its implications. They should also be able to work collaboratively with other professionals such as your accountants or financial advisors. A good tax litigator often coordinates with a corporate client’s CFO or external tax advisors to ensure everyone is on the same page. In court or negotiations, strong communication skills translate to persuasive advocacy – but internally, they mean you’ll always know where your case stands and can make informed decisions. In short, look for an advocate who is not just legally savvy but also a clear communicator and trusted advisor to your business.

Conclusion

When a Canadian business is selecting a tax litigation and disputes lawyer, these qualities – deep tax law expertise, strategic thinking, CRA/courts familiarity, negotiation prowess, industry knowledge, and solid communication – are key indicators of a strong advocate. A lawyer who embodies these traits will be well-equipped to protect your company’s interests in a tax dispute. They will navigate the technicalities of tax legislation and the nuances of CRA procedure, all while keeping your business objectives in focus. By choosing a tax disputes lawyer with the right mix of legal skill and practical insight, you can approach any CRA audit or tax litigation with greater confidence that your case is in capable hands.

Understanding CCPC vs. Non-CCPC Status

In Canada, a Canadian-controlled private corporation (CCPC) is generally a private corporation that is Canadian-controlled (generally not controlled by non-residents or public companies) and is a “Canadian corporation” (generally incorporated or resident in Canada).

CCPC status confers certain tax benefits (like the small business deduction and enhanced R&D credits) but also imposes a high tax on passive investment income through a refundable tax mechanism. This refundable tax regime effectively prevents shareholders from deferring personal tax by earning investment income inside a CCPC – the CCPC pays ~50% tax upfront on passive income, part of which is refunded only when dividends are paid out to shareholders.

In contrast, a non-CCPC can access the lower general corporate tax rate on investment income or capital gains, avoiding the punitive refundable tax. The trade-off is losing CCPC-specific benefits (e.g. small business deduction, capital gains exemption on shares, etc.). Many private business owners and tax advisors find this trade-off worthwhile in order to achieve a deferral or reduction of tax on investment income or one-time capital gains.

Common Strategies to Become a Non-CCPC

“Non-CCPC planning” refers to tax planning that intentionally causes a corporation to lose its CCPC status to take advantage of lower tax rates on certain income. Several strategies emerged in recent years to accomplish this, including:

Continuance Outside Canada (Corporate Residency Planning):

A CCPC could be continued into a foreign jurisdiction (e.g. the British Virgin Islands) while keeping its mind and management in Canada. Because it is then deemed incorporated abroad, it no longer qualifies as a “Canadian corporation” under the Income Tax Act (Canada). It remains a Canadian tax-resident private corporation, but not a CCPC. As a result, the corporation still pays Canadian tax on its income but now at general corporate rates on passive income and capital gains – avoiding the CCPC refundable tax mechanism and achieving a significant tax deferral advantage.

Voting Control Held by Non-Canadians or Public Entities:

Another approach was to deliberately transfer or grant voting control of the corporation to a non-resident person or a public corporation. This could be done by granting an option that allows a non-resident or public company to acquire control. Under the tax rules, if a non-resident or public company has a right to acquire shares that would give control, the corporation is deemed controlled by them for CCPC purposes, thereby disqualifying it as a CCPC. These “voting rights” tactics were often seen as simpler and less aggressive than a full continuance to a foreign jurisdiction, since they could be structured with legal agreements while the business operations remained unchanged.

Going Public (Listing Shares):

Listing the company’s shares on a stock exchange was a straightforward way to lose CCPC status. A CCPC must be a “private corporation,” so once any class of its shares becomes listed on a designated stock exchange, the company becomes a public corporation and immediately ceases to be a private corporation and hence a CCPC.

Each of these strategies results in a non-CCPC that is still a Canadian tax-resident but is no longer subject to the CCPC rules. The primary goal was to realize certain income or gains inside this non-CCPC at lower tax rates. For example, owners planning to sell shares with a large accrued gain, or those anticipating substantial investment income (interest, rent, portfolio dividends, etc.), implemented non-CCPC status before the income events to sidestep the higher CCPC tax on such passive income.

Government Response and Timeline of Changes

Aggressive non-CCPC planning gained traction in the late 2010s, and tax authorities took notice. In early 2022, the government moved swiftly to counter these strategies on two fronts:

February 4, 2022 – Notifiable Transactions Proposal:

The Department of Finance introduced draft mandatory disclosure rules including a category of “notifiable transactions” specifically targeting CCPC status manipulation. Non-CCPC planning was identified as one of six sample transactions of interest – essentially flagging it as a potentially abusive tax strategy that would require rapid disclosure to the Canada Revenue Agency (CRA) if undertaken. Taxpayers and their advisors would have to report any transaction or series “involving manipulation of CCPC status to avoid the refundable tax regime” within a short deadline (originally 45 days). This proposal signaled that the CRA viewed non-CCPC planning as a transaction of interest, carrying significant penalties for non-disclosure once the rules came into effect.

April 7, 2022 – Substantive CCPC Rules Announced:

The 2022 Federal Budget delivered a more direct blow to the tax benefits of non-CCPC planning. It proposed new “substantive CCPC” rules designed to eliminate the deferral advantage. In essence, any private corporation that is factually or legally controlled by Canadian residents but had ceased to be a CCPC (a “substantive CCPC”) would still be subject to the CCPC’s punitive tax rate on investment income. This means even if a corporation successfully changed status to non-CCPC, its interest, rental, and investment income would be taxed as if it were a CCPC, removing the main incentive for the planning. However, unlike a true CCPC, such corporations would not get the usual CCPC perks (like the small business deduction or enhanced credits). The substantive CCPC measure was effectively a “backstop” to ensure the higher tax on passive income applies based on who ultimately controls the corporation (Canadian individuals) rather than the technical CCPC status.

These twin measures created immediate concern for taxpayers in non-CCPC structures. Advisors recommended urgent action – either unwinding the structure (e.g. continuing the corporation back to Canada or cancelling any agreements that caused the loss of CCPC status) before the new rules took effect, or preparing to comply with reporting obligations once they became law. Notably, the draft notifiable transaction rules were to apply retroactively to transactions from January 1, 2022. This meant even steps taken in early 2022 could eventually require disclosure.

Late 2022 – 2023:

There was a period of uncertainty as the proposals awaited enactment. The Department of Finance announced in late 2022 that the new reporting requirements (notifiable and enhanced reportable transactions) would not kick in until the legislation received Royal Assent. In June 2023, Parliament passed these rules, and by late 2023 the CRA formally designated its first list of notifiable transactions. Interestingly, non-CCPC planning was not on the final list. The CRA had initially listed CCPC status manipulation as a targeted transaction in the 2022 draft backgrounder, but by the time of implementation it was omitted – likely because the substantive CCPC rules were addressing the issue directly. In other words, the government chose to solve the problem by changing the law (removing the tax benefit) rather than relying on continual disclosure of such transactions. Additionally, standard “reportable transaction” rules (which hinge on confidential or contingent fee arrangements) generally did not capture routine structural changes like CCPC status planning, so most non-CCPC plans were not automatically reportable under those hallmarks.

Effective 2023–2024:

The substantive CCPC legislation is now in force (with retroactive application to mid-2022). Starting with 2022 taxation years, many corporations that were non-CCPCs now have to pay the CCPC-level tax on passive income.

The window for benefiting from non-CCPC structures has essentially closed for current and future years – any ongoing deferral advantage largely evaporated once the law changed.

CRA Audits and Recent Developments

Although mandatory disclosure of non-CCPC transactions was ultimately not required, the CRA has not been complacent. Now (2023–2025), the CRA is actively auditing taxpayers who engaged in non-CCPC planning, especially for years before the new rules took effect.

In fact, the CRA is reviewing these cases and challenging them under the General Anti-Avoidance Rule (GAAR) for pre-2022 tax years. The GAAR is a broad rule that allows authorities to deny tax benefits of “abusive” avoidance transactions. The CRA’s position is essentially that deliberately avoiding CCPC status solely to obtain a lower tax rate might abuse the object of the law, and thus could be subject to GAAR for years when it was otherwise legal. However, applying GAAR is contentious and not guaranteed to succeed in challenging non-CCPC planning.

For 2017–2021 tax years, CRA audits are focusing on GAAR because at the time non-CCPC planning technically complied with the letter of the law. For 2022 and later years, the CRA has a simpler tool – the substantive CCPC rules themselves. If a corporation controlled by Canadians tried to avoid CCPC status in 2022 or beyond, the law now explicitly denies the tax benefit (by taxing its passive income at higher rates), negating the need for a GAAR argument. In practice, this means any corporation that remained a non-CCPC into 2022 should have started paying tax as a substantive CCPC from that point forward.

The era of lucrative non-CCPC tax planning has effectively ended. Tax professionals and business owners who engaged in such planning should be aware that while they may not have had to file a specific report to the CRA about it, their transactions are on the CRA’s radar. Some may find their structures under review, with the outcome hinging on the courts’ interpretation of the GAAR. They are now under the watchful eye of the tax authorities.

This article was originally published by Law360 Canada (www.law360.ca), part of LexisNexis Canada Inc.

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 have the option to consider it as “deemed” to be confirmed 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 must pay 50% of the disputed tax upfront. 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.

The Canada Revenue Agency (CRA) is rolling out new security measures for its online services ahead of the 2026 tax season. Starting in February 2026, all CRA My Account and My Business Account users will be required to have a backup multi-factor authentication (MFA) option on file. In practical terms, this means that in addition to your primary MFA (such as receiving a code by phone), you must set up at least one secondary authentication method – for example, a passcode grid or a third-party authenticator app. The goal of this change is to further strengthen the security of CRA accounts and prevent users from getting locked out during the MFA process.

Why Is CRA Requiring a Backup MFA Method?

During tax season, malicious actors ramp up their efforts to access taxpayers’ online CRA accounts to steal sensitive information or file fraudulent tax returns or benefit claims. In recent years, there have even been instances of mass account lockouts as a precaution against credential breaches. In 2021 the CRA locked hundreds of thousands of accounts after discovering stolen passwords being used by bad actors. These risks have prompted the CRA to continually improve its security measures.

Multi-factor authentication,  which requires a one-time passcode each time you sign in, has already been mandatory for CRA accounts for some time. Until now many users relied on a single MFA method,often a code sent to a phone. If that single method becomes unavailable (e.g. you lose your phone or don’t have cellular service), you could be locked out of your account. This could cause you to miss important CRA communications or being unable to file returns by the required deadlines.

By mandating a backup MFA option, the CRA aims to ensure that taxpayers always have an alternate way to access their accounts even if their primary MFA method fails or is unavailable. According to the CRA, enrolling in more than one authentication option will “help ensure that you can still access your CRA account if you change your phone number, misplace your passcode grid, or delete the third-party authenticator app”. In short, this security enhancement is about both fraud prevention and avoiding unintended lockouts that could disrupt your access to important tax services.

Avoid Being Locked Out During Critical Tax Deadlines

From a taxpayer’s perspective, especially if you’re dealing with time-sensitive tax matters, this change is a welcome safeguard. The worst time to discover you’re locked out of your CRA account is when a filing, audit response, or objection deadline is looming. For instance, if you need to access your CRA My Account to retrieve tax slips before the April filing deadline, or if you must submit documents for an audit or file a Notice of Objection, not being able to log in could cause serious delays or even jeopardize your rights. Being locked out at a critical moment can result in missed deadlines, late-filing penalties, or lost opportunities to respond to the CRA. These scenarios often lead to unnecessary stress and potentially costly disputes.

By setting up a secondary login factor now, you can avoid the last-minute scramble. If your primary MFA method stops working at tax time (for example, your phone number changes or you lose access to your authenticator app), you’ll have a backup ready to go. This proactive step could save you days or even weeks of delay that might otherwise occur if you had to go through account recovery procedures.

How to Add a Backup MFA Method to Your CRA Account

The CRA is urging all users to log in and add a backup MFA option well before it becomes mandatory. The CRA’s website provides detailed instructions on updating your MFA settings and enrolling in multiple options. If you have only ever used one MFA method on your account, it’s a good idea to log in and add at least one backup method as soon as possible. It takes only a few minutes and ensures that when the new rule kicks in, you won’t face any hiccups signing in, or worse, find yourself unable to access your account when you need it most.

Additional Security Measures and Best Practices

The new backup MFA requirement is part of a broader effort by the CRA to safeguard taxpayer information. In addition to MFA enhancements, the CRA has been proactively revoking user IDs and passwords that appear compromised or that haven’t been used for a long time to prevent malicious actors from exploiting old or stolen credentials. The agency has also ramped up actions against phishing scams. Over the past year, hundreds of fraudulent websites impersonating the CRA have been taken down. Taxpayers are reminded to be vigilant by only using official CRA websites (addresses starting with Canada.ca or ending in .cra-arc.gc.ca) and to avoid clicking on links from unsolicited emails or texts purporting to be from the CRA.

The Bottom Line: Act Now to Secure Your CRA Account

In summary, the CRA’s new backup MFA mandate is a smart precaution to protect taxpayers, but it only helps if you take action. Don’t wait until February 2026 when the requirement becomes official or until you’re racing against a tax deadline. Log in to your CRA My Account or My Business Account and add a secondary MFA method as soon as possible. Doing this now will save you time and trouble later, ensuring that you can confidently access your tax information or deal with the CRA when it matters most. By strengthening your account security today, you’re not only complying with the new rules, but also gaining peace of mind that you’ll have one less thing to worry about during the hectic tax season.

For step-by-step guidance on adding a backup MFA option, refer to the CRA’s official instructions on updating your multi-factor authentication settings. For the official announcement of the backup MFA requirement, see the CRA’s news release on keeping your information safe this tax season. Each of these resources provides additional details to help you navigate the process.