Good things come in small packages…but what of small brown envelopes?

You have filed your taxes and here it is…that brown envelope appears in your mailbox. It’s your notice of assessment. Maybe all is well and your tax return has been accepted exactly how it was filed, all is well and everyone can go on living their lives exactly like before that brown envelope was opened. But what if there is bad news in that brown envelope. What does it mean if CRA has decided to disallow a good chunk of your employment expenses? Why do you owe money back to CRA? What can you do?

It is important to note that it is a taxpayer’s responsibility to ensure that their tax return is accurate and that your records are complete. Ensuring that you keep your receipts and keep accurate and complete travel logs to support your submitted tax return will ensure that your case is easier to defend.

Once the tax return is filed, CRA can modify which expenses are disallowed. This can occur if CRA deemed your records to be incomplete or did not think your numbers stood the test of reasonability.

You might be asking what is a notice of objection…it is a chance for you to challenge CRA’s assessment of your tax situation. We have prepared notice of objections for clients that have received such unpleasant letters. The good news is that you have 90 days to file a notice of objection, with the possibility of extending it to one year after your filing-due date for that year.

It’s also important to consider that CRA is unable to take collection action against you during the period in which you are disputing your tax debt after filing a notice of objection – although interest on your debt is still calculated. If your claim is successful, your interest will be forgiven and all funds paid to CRA in relation to the disputed debt will be reimbursed to you.
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To ensure a success, the objection needs to be structured correctly and all claimed backed up by receipts, invoices, logs or other pertinent information. This is why it is important to work with an experienced tax professional when filing Notice of Objections. Our team includes a CRA veteran with 44 years of experience in tax audit. Contact us for more details.