Here is Part II of Raphael‘s guide.
After the objection process, if you are still not satisfied, you can take your case to the Tax Court of Canada (www.tcc-cci.gc.ca). The TCC is a neutral, independent court of law and is separate from the CRA. The judges don’t work for the CRA – their job is to decide whether the CRA’s tax assessment was correct under the appropriate laws.
The deadline for appealing to the TCC is 90 days after the date on the Notice of Confirmation or Reassessment. In most cases, you can appeal using the Court’s “Informal Procedure”. This process works like small claims court – the rules are simplified, documents don’t have to follow specific forms, and you can get your day in court relatively quickly. You can also choose to represent yourself or have somebody else (a friend, accountant, lawyer etc) advocate on your behalf.
To start the tax appeal, you need to send a Notice of Appeal to the nearest Tax Court office (see www.tcc-cci.gc.ca for addresses and phone numbers). If you’re following the informal procedure, you don’t need to use a specific form, but the court does provide fill-in-the-blank forms you can use if you’d like. At a minimum, the Notice of Appeal made under the informal procedure needs to be in writing and include:
* Your name, address, and phone number
* If you’re not representing yourself: your representative’s name, address, and phone number.
* A description of what you want to appeal – e.g. “The Notice of Confirmation dated April 10, 2008 for my 2006 income taxes”.
* The facts and reasons why you disagree with the CRA’s decision.
* A statement that you want to follow the informal procedure.
* A filing fee of $100 (refunded automatically if your appeal is successful).
After filing the Notice of Appeal, the TCC will send a copy to the CRA, who must respond to it within 60 days. CRA will send a copy of their reply to you and to the court. After the CRA files its reply, the TCC will set a date for the appeal to be heard, and you’ll get a notice telling you when and where you’ll get your day in court. It’ll also tell you to bring any documents that support your case with you to the hearing.
Before the court hearing, you’ll get a letter telling you the name of the lawyer who will represent the CRA in court. It’s a good idea to call this lawyer and ask to meet with him or her before the day of the hearing – you can show them the documents in support of your appeal, and after some discussion they might decide to settle the case without the need of a court hearing. This is a much easier way to deal with the case than going to the time and expense of a court case. In the eyes of the justice system, an agreed-upon settlement between the parties is always preferable to a court hearing.
If the case doesn’t settle and needs to go to court, the hearing will probably not be what you’d expect. Anything you’ve seen on “Law and Order” won’t apply in a Canadian courtroom. The TCC publishes a helpful brochure called “Your Day in Court” (http://www.tcc-cci.gc.ca/reference/day_%20in_court_e.pdf) that lets you know what will happen in the courtroom, who gets to speak and when, and other information about the hearing. Court hearings are open to the public, so you can watch other people’s cases to get a feel for how things work – the TCC publishes a schedule on its web site (www.tcc-cci.gc.ca) or you can call any TCC office for hearing dates.
The TCC judge will listen to your evidence and any evidence from the CRA, along with legal arguments from both sides. Bear in mind, though, that the judges can’t ignore or override the law. If the Income Tax Act says, for example, that a deduction for XYZ isn’t allowable, then the judge can’t decide otherwise. The judge’s job is to interpret and apply the law, not to write or rewrite the law.
In many cases the judge will give his or her decision at the end of the hearing, so you’ll know the result right away. The CRA must obey the judge’s decision, and reassess your taxes in accordance with the court’s ruling. If you (or the CRA) thinks the TCC judge made a mistake or misinterpreted the law, the decision can be appealed further, to the Federal Court of Appeal and beyond to the Supreme Court of Canada, but in most cases the TCC decision is the end of the matter.