Frequently Asked Questions
Frequently Asked Questions
Canadian Tax Lawyer FAQ (Tax Disputes & Litigation) — Taxpayer Law
If you’re facing a CRA audit, reassessment, collection action, or need to appeal to Tax Court, this FAQ explains your rights, options, and timelines – and when a Canadian tax lawyer (a.k.a. tax attorney) should step in.
Table of Contents
- Start Here
- CRA Reviews & Audits
- Assessments, Objections & Deadlines
- Appeals & Tax Court Litigation
- Collections, Payment Relief & “Jeopardy”
- Lawyer vs. Accountant vs. Consultant
- Business, Non-resident & Crossborder Issues
- Fees, Hiring & “Tax Lawyer Near Me”
- Process, Documents & Timelines
- NRST
- CEWS and CERS
- Canadian Builder GST/HST and Audit
- Directors’ Liability Assessments
Start Here
What does a Canadian tax lawyer (tax attorney) actually do?
A tax lawyer provides legal strategy and representation in CRA disputes: audits, notices of objection, settlements, and Tax Court appeals. We build legal arguments, manage deadlines, negotiate outcomes, and appear in court on your behalf.
When should I involve a tax lawyer instead of just my accountant?
Bring in a lawyer when: (1) a reassessment is wrong, (2) a Notice of Objection is needed, (3) penalties/fraud are alleged, (4) collections escalate (garnishment, liens), or (5) Tax Court is likely. Tax dispute and Tax Court work is in a lawyer’s lane; we can collaborate with your accountant.
Is “tax attorney” the same as “tax lawyer” in Canada?
Yes – “attorney” and “lawyer” are used interchangeably. You’re looking for a Canadian tax lawyer admitted to a provincial/territorial law society.
Are my conversations with a tax lawyer confidential?
Solicitor-client privilege protects lawyer-client communications; it’s a cornerstone principle recognized by Canadian law (and the Supreme Court) and is stronger than ordinary confidentiality. This protection does not generally extend to non-lawyers (e.g., accountants/consultants).
Will hiring a lawyer make me look guilty to CRA?
No. You hire a lawyer to navigate any serious legal matter, and dealing with CRA is no different. CRA prefers dealing with a tax lawyer because they know that a tax lawyer understands what is necessary to advance or resolve a case. In fact, having someone who understands their processes can help resolve the dispute more quickly.
CRA Reviews & Audits
What’s the difference between a CRA “review” and an “audit”?
A review is usually a routine check of specific claims or documents; an audit is a deeper examination of books and records, or an examination of a particular transaction (like the sale of a home). Reviews aren’t the same as audits, but either can lead to consequences if issues are found.
What happens during a CRA audit?
Auditors verify records, may visit your business, request information, and discuss findings. Expect identity verification, an initial interview, and requests for ledgers, invoices, receipts, and bank records.
What triggers a CRA audit?
CRA uses risk-based selection (analytics, third-party data, sector risk). Real estate transactions and other higher-risk sectors are frequent audit targets.
How far back can CRA ask for information?
There is no limit. Don’t underestimate CRA’s audit powers – they can ask for information from over 10 years ago.
What should I do with my audit questionnaire from the CRA?
It may seem routine, but CRA uses your responses to craft its position for a reassessment against you. You want your story presented in the best light. We help craft your responses so they’re viewed favorably by CRA.
Is CRA recording my conversations?
Auditors and collection agents keep detailed notes of every conversation with taxpayers (and their representatives). You can obtain these notes by making an Access to Information and Privacy (ATIP) request.
Can my tax lawyer speak to CRA for me?
Yes. We can be your authorized representative, attend meetings, and handle communications – reducing risk from off-the-cuff responses.
Will CRA send me to jail?
CRA only refers the most egregious cases to its Criminal Investigations Department (CID). The vast majority of tax disputes never rise to that level.
Assessments, Objections & Deadlines
CRA audited and reassessed me – am I in trouble?
Not necessarily. CRA auditors can be aggressive and don’t always take reasonable positions. The good news is that many reassessments get reduced or overturned through an objection or appeal – so don’t panic!
I disagree with my Notice of (Re)Assessment. How do I fight it?
File a Notice of Objection explaining the facts and reasons, with supporting documents. This starts an impartial Appeals review inside CRA.
What’s the deadline to file a Notice of Objection?
● Individuals (T1): The later of (i) 90 days after the CRA sent your Notice of Assessment/Reassessment, and (ii) one year after your personal filing due date for that tax year.
● Corporations (T2): 90 days after the CRA sent the Notice of Assessment/Reassessment.
Missed the deadline? You can apply for an extension of time within one year after the normal objection deadline expires.
What happens after I object?
CRA assigns an Appeals officer who reviews your objection and may contact you or your representative; many matters resolve here. If not, you can appeal to the Tax Court of Canada.
Does CRA need to prove what I owe?
Generally, no. CRA can assume you owe what they assess, and you are responsible for disproving those assumptions. Our system expects taxpayers to self-report accurately, so the burden of proof is normally on you. There are exceptions: if CRA is reassessing a year that’s normally off-limits (due to alleged misrepresentation), or if they’ve imposed a gross negligence penalty, then CRA must prove those claims.
Can I just cut a deal with the CRA?
CRA will only agree to settle on a principled (legal) basis. In other words, you must point to a valid reason in the tax law to justify any reduction in tax — they won’t simply “split the difference” for convenience. Often, CRA negotiations are either all-or-nothing (e.g. a gross negligence penalty is upheld or eliminated entirely) or partial (e.g. a reassessed income amount is negotiated down), but even a partial settlement must have a legal justification.
Should I phone CRA myself and explain what went wrong?
Tax legislation is very technical, and saying the wrong thing could make things worse. If you need to dispute or appeal a reassessment, you must follow the formal objection/appeal process and put your case forward in the most favorable light (often with professional help).
Will CRA pause collections while my objection is pending?
Usually, yes – CRA postpones collection on disputed income tax amounts during objections/appeals. However, interest keeps accruing, and there are important exceptions (e.g., payroll, GST/HST amounts, “jeopardy” cases, large corporations).
Appeals & Tax Court Litigation
When can I go to the Tax Court of Canada?
You can appeal to the Tax Court within 90 days after CRA’s objection decision (Notice of Confirmation) – or if CRA hasn’t decided your income tax objection within 90 days (180 days for GST/HST), you may proceed directly to Tax Court.
What’s the difference between Informal and General Procedure?
● Informal : Streamlined; you can self-represent or use an agent. Monetary limits apply (generally ≤ $25,000 per tax year for income tax, or ≤ $50,000 for GST/HST).
● General : Formal rules of court, discovery, and witnesses – the realm of tax litigators (no monetary limits on amounts in dispute).
Do I need a lawyer in Tax Court?
Under the Informal procedure, you may self-represent or have an agent (e.g., an accountant). For General procedure, legal counsel is strongly recommended and sometimes required (in the case of corporations).
What’s the realistic timeline for a Tax Court appeal?
It varies by complexity and court schedules. We aim to resolve cases earlier where possible (settlements or consent judgments), but we build full trial strategies when needed.
Collections, Payment Relief & “Jeopardy”
How long do I have to repay a tax debt?
Generally about six months. CRA’s typical policy is to have the balance paid off within 6 months, but you may be able to negotiate a longer payment plan by providing full financial disclosure.
CRA is garnishing my wages / froze my bank — what now?
Call us. We can negotiate payment arrangements, request holds or relief where justified, and challenge legal warnings or liens where appropriate. (CRA can continue collections in some cases despite our interventions.)
If I have a tax debt, can I transfer my assets to a family member instead?
CRA can come after the tax. They can detect transfers meant to avoid payment and have the power to assess the recipient for your tax debt. In general, moving assets below fair market value to a non-arm’s-length person (like a family member) when you owe taxes can result in CRA holding that person liable for your debt.
What is a “jeopardy” situation?
If CRA believes its ability to collect is at immediate risk, it can obtain a court-issued jeopardy order to keep collecting even while a dispute or objection is ongoing. You can ask a court to review the order, but the order stays in effect during that review.
Can posting “security” halt collections on disputed amounts?
Yes. CRA will accept security (e.g. cash or a bond) that is satisfactory to the Minister. Once such security is posted, no collection action is taken on the disputed amount while your objection or appeal is pending.
Does CRA ever require payment during an objection?
Large corporations generally must pay 50% of the disputed income tax up front. Also, for GST/HST and payroll source deductions, CRA will continue to collect even if you object or appeal.
Can I get penalties/interest cancelled?
Possibly. CRA’s Taxpayer Relief program allows the cancellation or waiver of penalties and interest in specific circumstances (e.g., extraordinary events or clear CRA error).
Lawyer vs. Accountant vs. Consultant
What’s the difference between a tax lawyer and a tax accountant?
● Accountant (CPA): Handles filings, calculations, financial records, and tax planning.
● Tax lawyer: Handles legal interpretation, disputes, negotiations, court advocacy, and provides privileged advice.
Accountant communications generally aren’t privileged, whereas communications with a lawyer are.
Are “tax consultants” regulated?
“Tax consultant” isn’t a protected title. Law societies regulate lawyers in the public interest and enforce professional and ethical standards – a level of oversight consultants don’t have. Always verify a tax consultant’s credentials and experience.
Business, Non-resident & Crossborder Issues
Does owning a corporation protect me from its tax liability?
Not completely. A corporation may shield you from some business liabilities, but certain tax debts follow individuals. For example, corporate directors can be held personally liable for a company’s unpaid GST/HST or payroll source deductions, and shareholders can be liable if they received dividends when the corporation owed taxes.
Do you handle corporate/GST/HST/payroll disputes?
Yes. We manage corporate income tax objections and appeals, as well as indirect tax (GST/HST) and payroll source deduction disputes – including director liability issues. These are areas where timelines and collection rules may differ from regular personal tax disputes.
Can a Canadian tax lawyer represent me if I’m outside the province – or outside Canada?
Yes. Tax Court matters are federal, and a lawyer admitted in any province can represent clients Canada-wide. Mobility rules enable cross-provincial practice (both temporary and transfer of jurisdiction).
I’m a non-resident with Canadian tax issues – can you help?
Yes. Non-residents often face Canadian tax on real estate sales, rental income, business profits, or other dispositions. We handle the required filings, objections, and appeals on your behalf while you reside abroad.
Fees, Hiring & “Tax Lawyer Near Me”
How much does a tax lawyer cost?
Fees depend on complexity and stage (objection vs. Tax Court). We provide estimates and staged budgets.
Can I deduct my legal fees on my tax return?
Often, yes. Legal fees incurred to dispute an income tax reassessment are generally tax-deductible. Always confirm with your tax advisor that your specific legal fees qualify.
How do I find a tax lawyer near me?
Look for dispute/litigation experience and strong client reviews. Today, location is less critical – we serve clients Canada-wide.
Will you work with my existing accountant?
Absolutely. Your accountant manages records and filings; we manage legal strategy, negotiations, and litigation.
Process, Documents & Timelines
How long will it take to resolve my tax dispute?
It depends. A simple dispute might resolve in as little as 3–6 months, whereas more complex disputes can take several years to fully conclude.
What documents should I gather for an objection or audit?
Key items include: assessments/reassessments, audit letters, financial statements, ledgers, bank/credit card statements, invoices/receipts, contracts, and any prior correspondence with CRA. Essentially, CRA expects you to provide the facts, reasons, and supporting evidence with your objection or audit response.
Can I get a copy of my file from the CRA?
Yes. Upon request, CRA will provide you with a copy of your file (which contains the CRA’s notes and records of your case). We routinely request clients’ files from CRA to gather insights on their position.
How long do CRA objections take?
Timelines vary by complexity. CRA publishes periodic statistics — for example, recent medium-complexity objections have averaged a number of months to resolve. We monitor the progress and escalate when warranted.
Do I have to pay while I dispute?
In most cases, no – you usually don’t have to pay the disputed amount during an objection or appeal (interest still accrues on it). However, exceptions apply (e.g., large corporations, and amounts like GST/HST or payroll deductions). We’ll help you map out any exposure and options in your situation.
Can you arrange payment plans if I owe?
Yes. We negotiate payment arrangements with CRA and can pair them with Taxpayer Relief requests when the facts support it (for instance, in extraordinary circumstances).
NRST
Find our NRST FAQ page, here.
CEWS and CERS
Find our CEWS and CERS FAQ page, here.
Canadian Builder GST/HST and Audit
Find our Canadian Builder FAQ page, here.
Directors’ Liability Assessments
Find our Directors’ Liability Assessments FAQ page, here.