Skip To Content

Canadian Tax Update – Collections, audits, objections and appeals

Author(s): Monica Biringer, Mark Brender, Patrick Marley, Maude Lussier-Bourque, Ilana Ludwin

Mar, 24, 2020

Updated March 27, 2020

The following is a summary of the relief measures regarding collections, audits, objections and appeals recently announced by the Canada Revenue Agency (CRA). These measures are intended to relieve some of the financial distress and uncertainties currently experienced by businesses and individuals resulting from the COVID-19 pandemic.

Collections

The Canada Revenue Agency announced that collections activities on new debts will be suspended until further notice, and flexible payment arrangements will be available.

With respect to pre-existing situations, they will be addressed on a case-by-case basis to prevent financial hardship. Payment arrangements are also available on a case-by-case basis if a taxpayer cannot meet its tax payment obligations.

The Canada Revenue Agency also advised that taxpayers can submit a request to cancel penalties and interest if they are prevented from complying with a tax obligation (such as making a payment or filing a return in due course) because of circumstances beyond their control. Please do not hesitate to reach out to us if you are interested in submitting a request.

Audits

As addressed in our Osler Tax Update Important Canadian tax updates – Filings and disputes published on March 18, 2020, the Canada Revenue Agency announced that it will not contact taxpayers to initiate any new audits.

The Canada Revenue Agency clarified that it will temporarily suspend interactions with taxpayers and representatives for audits already in progress for the vast majority of taxpayers. Interactions with taxpayers will be limited to situations where the legal deadline to reassess a tax return is approaching, and in cases of high-risk GST/HST refund claims that require some contact before they can be paid out.

On March 27, 2020, the Government of Canada specified that, with certain exceptions, no requests for information related to existing audits should be issued to taxpayers. Moreover, the Government of Canada held that the Canada Revenue Agency should not finalize audits and issue reassessments.

Objections and Appeals

On March 27, 2020, the Government of Canada announced that the deadline for any objection originally due between March 18, 2020 and June 30, 2020 is now June 30, 2020.

The Canada Revenue Agency indicated that objections related to entitlement to benefits and credits have been identified as a critical service and, as a result, taxpayers should not expect any delays associated with the processing of these objections.

With respect to objections related to other tax matters filed by individuals and businesses, the Canada Revenue Agency is currently holding these accounts in abeyance and no collection actions should be taken with respect to these objections during this period.

With respect to appeals before the Tax Court of Canada, by orders of the Chief Justice dated March 16, 2020 and March 23, 2020, the Court will be closed until May 1, 2020 and the period beginning on March 16, 2020 and ending on May 1, 2020, will be excluded from the computation of all deadlines prescribed by the rules of the Court and prior orders or directions of the Court. This period may be further extended.

Information published by the Canada Revenue Agency, the Department of Finance and the Tax Court of Canada regarding the above can be found at the following links:

For further information on the above changes or other tax matters, please contact one of the authors above or any member of our National Tax Group.