Objecting to the CRA assessment of your tax return
The Auditor General of Canada in its 2016 report indicated that there may be cases where taxpayers disagree with the Canada Revenue Agency's (CRA) assessment of their tax returns. One of the avenues available to taxpayers to dispute CRA's assessment is by filing a Notice of Objection through the Appeals Branch. The Auditor General's findings were as follows:
In 2014, there were 66,864 objections filed with the amount being under dispute amounting to $4.8 billion. As of March 31, 2016, the CRA's inventory of objections stood at 171,744 for both personal and corporate income taxes with the amount being under dispute amounting to $18 billion.
The focus of the audit by the Auditor General of Canada was to determine whether the CRA was efficiently managing income tax objections. The audit assessed efficiency by examining the time the Agency took to provide taxpayers with decisions on their objections. In addition, the audit examined the various stages in the objection process to identify where these delays occurred.
The report found that the CRA did not resolve income tax objections in a timely matter. One of the analyses used to support this finding was processing times and reasons for delay. The audit found that over a five-year period, the CRA did not assign an objection to an appeals officer until 150 days, on average, after the taxpayer had mailed the Notice of Objection. The number of days, on average, to ultimately resolve these objections was as follows:
- 143 days for low-complexity objections
- 431 days for medium-complexity objections
- 896 days for high-complexity objections
The report found that 65 percent of the objections reviewed resulted in decisions that favoured taxpayers in full or in part. Under the Agency's Taxpayer Bill of Rights, taxpayers have the right to receive timely information. The efficiency of the CRA in processing these objections can factor into the costs incurred by the taxpayer.