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When your tax return is first processed, it receives what's sometimes
called a "quick assessment". A basic check is done to make sure the
numbers add up and that you're not claiming anything which is obviously
disallowed or which isn't supported by receipts you should have filed.
For most individuals, this assessment is all you'll ever see.  It's
mailed to you at the same time as your refund cheque, if you get
a refund.

If Revenue Canada decides to review or audit you file, they may
reassess you. A reassessment can be done up to 3 years from the
date of mailing of the original assessment. So if you filed your
1983 return in April 1984 and the assessment was mailed on June 15,
1984, then your 1983 return becomes "statute-barred" on June 15,
1987 and you no longer have to worry about being reassessed.

An exception is cases of fraud, or misrepresentation due to
neglect -- the sort of stuff that's generally considered tax evasion.
In such cases, there's no limit on when there can be a reassessment.

If you disagree with an assessment or reassessment
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The first step is usually to contact the District Taxation
Office for your area to discuss the problem, or write to them.
If you're filing new information (you forgot to claim something)
or believe they misinterpreted or miscalculated your return, you
can probably clear it up fairly easily this way.

To protect your legal rights, you need to file a "Notice of
Objection" within 90 days of the date of mailing of the
assessment or reassessment you're objecting to. Even if you've
already brought the problem to Revenue Canada's attention,
filing the Notice of Objection will have to be done within the
deadline if you ever want to appeal to the Tax Court.

Revenue Canada's administrative policy is to allow you to refile with
new information or to correct errors, in most cases, any
time within the 3-year period. However, they aren't *required*
to do this, so if the amount involved is substantial, you should
file a Notice of Objection.

The Notice of Objection is a simple form that you fill out,
explaining why you're objecting, and should be sent by
registered mail.

There's an appeals department within Revenue Canada that will
deal with your objection first; this group is independent of
the auditors who may have reassessed you. If your objection
is still turned down, you can appeal to the Tax Court of Canada.

The Tax Court is a relatively informal tribunal (it used to
be called the Tax Review Board, in fact), and it's not as
strict about procedure and the laws of evidence as other
courts are. You can certainly go without a lawyer, though of
course you want to prepare your case carefully and make sure
you understand the provisions of the Income Tax Act you're
discussing.

From the Tax Court, either you or Revenue Canada can appeal by
way of new trial to the Federal Court of Canada (Trial Division).
That requires a lawyer. Appeals from there go to the Federal
Court of Appeal, and thence to the Supreme Court of Canada (but
only with leave of that Court, which is rarely granted on tax
cases -- they hear perhaps 2-5 tax cases a year).

David Sherman, Consultant
The Law Society of Upper Canada
Toronto
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