If you have received a CRA Notice of Confirmation, it may feel like the Canada Revenue Agency (CRA) has slammed the door on your tax dispute. This formal notice means the CRA has reviewed your objection and decided to confirm the original assessment or reassessment. In other words, they’re saying their initial decision was correct and the disputed tax is still owed. However, receiving a Notice of Confirmation is not the end of the road for your case. You still have options to continue the fight and resolve your CRA tax dispute in your favor.
In this article, we explain what a Notice of Confirmation is, why it doesn’t mean your fight is over, and what next steps you can take. We’ll also highlight the strict deadline to appeal and why acting quickly (and possibly getting professional help) is crucial. Remember, even if the CRA has denied your objection, you may still be able to achieve a positive outcome – but you need to know the right steps to take.
What Is a CRA Notice of Confirmation?
A CRA Notice of Confirmation is a formal letter from the CRA’s Appeals Division that comes at the end of the objection process. When you file a Notice of Objection to challenge a CRA Notice of Assessment or Reassessment, an Appeals Officer reviews your case. That officer can decide one of three things: vary the assessment (make some changes in your favor), vacate the assessment (cancel it entirely), or confirm the assessment. If they confirm it, they issue a Notice of Confirmation – essentially stating the CRA believes the tax owing was assessed correctly and remains payable.
Think of the Notice of Confirmation as the CRA’s way of saying, “We’ve heard your arguments but stand by our original decision.” It signifies that the internal CRA objection process has run its course. Naturally, this can be discouraging news for a taxpayer hoping to get a reduction or reversal of the assessment.
However, do not panic. The Notice of Confirmation only means that the internal appeal within CRA is over; it does not mean you have no further recourse – you have the right to take your dispute to an independent body outside the CRA.
Why a Notice of Confirmation Is Not the End of the Road
Receiving a Notice of Confirmation opens the door to the next stage of the tax dispute resolution process: an appeal to the Tax Court of Canada. After a Notice of Confirmation, you essentially have two choices: either accept the CRA’s decision and arrange to pay the amount (including any interest), or continue the fight by appealing the decision the Tax Court of Canada.
The Income Tax Act (Canada) specifies that once the CRA has issued a Notice of Confirmation on your objection, the taxpayer’s only recourse is to appeal to the Tax Court of Canada (Tax Court). This is your opportunity to have an impartial court look at the facts, apply the law, and potentially overturn or reduce the tax assessment if it finds in your favor. Many taxpayers have successfully challenged CRA assessments in court, especially when they have strong evidence or legal arguments that the CRA may have overlooked or dismissed during the objection stage.
It’s important to note that going to Tax Court is a big step. It introduces a more formal legal process. While the Tax Court can provide a fresh hearing of your case, the process can be complex – involving filing legal documents (notices of appeal), possibly conducting discoveries, and attending hearings.
Act Fast – A Strict 90-Day Deadline to Appeal
While you can appeal a confirmed CRA assessment to the Tax Court, you need to be aware of a critical limitation: time. The moment the CRA sends out the Notice of Confirmation, the clock starts ticking on your opportunity to appeal. You generally have 90 days from the date on the Notice of Confirmation to file a Notice of Appeal with the Tax Court of Canada. This 90-day appeal window is set by law and is strictly enforced. Missing this notice of confirmation deadline can have serious consequences for your case.
That said, there is a small bit of wiggle room if you’ve missed the 90-day window, but it comes with strict conditions. Under the law, you may apply for an extension of time to appeal after the 90 days, but only up to one year beyond the original deadline (i.e., up to a total of 1 year and 90 days from the Notice of Confirmation date). To get this extension approved, you have to convince the Court of a few things: that you always intended to appeal or were unable to act sooner, that you applied as soon as you could once you realized the need, that you have a reasonable explanation for the delay, and that you have an arguable case for the appeal.
Keep in mind, extensions are not guaranteed. In fact, the Tax Court may be reluctant to grant them and will not do so unless you meet all the criteria. Thus, the safest approach is to assume you have just 90 days to act. Mark that deadline on your calendar and treat it as immovable. If you find yourself close to the deadline and unsure of what to do, it may be better to file something (even a bare-bones Notice of Appeal) to preserve your rights, rather than miss the deadline entirely. You can always flesh out your case later or even discontinue an appeal if needed, but you cannot turn back time if the deadline passes.
How to Appeal a CRA Notice of Confirmation (Overview)
Appealing to the Tax Court of Canada is a well-established process designed to give taxpayers a fair chance at justice. Here’s an overview of how an appeal works once you decide to challenge the CRA’s confirmed assessment:
- File a Notice of Appeal: To start your appeal, you must submit a Notice of Appeal to the Tax Court. This is a legal document outlining the issues in dispute and the facts as you see them. You can file it by mail, fax, online through the Tax Court’s system, or even deliver it in person. The key is that it must be received by the Tax Court within the 90-day window. There is no filing fee if you qualify to proceed under the Tax Court’s informal procedure (for smaller amounts of tax in dispute), but larger cases under the general procedure may require a modest filing fee.
- CRA’s Reply: After you file your appeal, the CRA (through its lawyers) will file a Reply to your Notice of Appeal. This is essentially their statement of defense, explaining why they think the assessment is correct.
- Pre-Trial Steps: Depending on the complexity, there may be pre-trial steps like discovery (where each side can ask for information and documents from the other). For Informal Procedure cases, this phase is usually simpler or skipped entirely, leading to a quicker hearing.
- Settlement Possibilities: Just because you’ve appealed doesn’t mean you’ll necessarily end up in a full court trial. There are opportunities to settle the case along the way. In fact, once an appeal is filed, the file is often handled by a Justice Department lawyer who may discuss settlement options. Sometimes disputes can be resolved through negotiation or alternative dispute resolution before reaching a judge. However, you should not count on this – always be prepared to present your case to a judge if needed.
- Hearing: If no settlement is reached, your case will go before a Tax Court judge at a hearing. You (or your lawyer) will present your evidence and arguments, and the CRA’s counsel will present theirs. The judge will then make a decision (which could take weeks or months to be delivered in writing).
Appealing to the Tax Court is essentially getting a fresh, independent review of the issues. Tax Court isn’t bound by the CRA’s internal decision; it looks at the law and facts anew. Many taxpayers find relief at this stage, especially if the CRA’s interpretation of the facts or law was questionable. Remember, the Tax Court’s mandate is to ensure the correct amount of tax under the law is determined – it’s not there to side with the CRA or the taxpayer arbitrarily. If you have a strong case, the Tax Court provides a forum to make it.
Getting Professional Help and Next Steps
Facing off against the CRA in Tax Court is a serious step, and time is of the essence. You have a short window – just 90 days – to act after receiving a Notice of Confirmation. If you’re unsure what to do next, this is the time to seek professional help. A seasoned tax lawyer who specializes in CRA disputes can provide invaluable guidance. We can assess the strength of your case, help prepare the Notice of Appeal, ensure all deadlines and formalities are met, and represent you through negotiations or in Tax Court.
