NOT ALL CRA DISCRETIONARY DECISIONS GO TO FEDERAL COURT!
Since the Supreme Court of Canada’s 2024 decisions in Iris Technologies and Dow Chemical, many taxpayers and tax practitioners have become well aware that the Tax Court of Canada is not a ”one-stop shop” for tax disputes.
The rule of thumb for "jurisdiction" is that most tax cases go to the Tax Court of Canada, but that CRA discretionary decisions must be challenged in the Federal Court.
As we see in the Ingredion case dealt with below, that may not ALWAYS be the case – and it introduced a third possible jurisdiction in some cases: Provincial Superior Courts!
POST COVID, CRA APPEALS BRANCH SLAMMED WITH NEW WORK!
The Canada Revenue Agency (CRA) recently released its 2025-26 Departmental Plan (“the Report”), outlining its priorities and recent performance. It reveals a critical piece of information that should serve as a warning for all taxpayers: the CRA is being overwhelmed by Notices of Objections (“NoOs”) and is struggling to keep up.
As we report on below, large businesses with complex tax issues are likely to suffer the most.
CRA DATA SHOWS THE MAJORITY OF TAX AUDITS OVERTURNED!
When most taxpayers receive a Notice of Assessment from the Canada Revenue Agency (CRA), they likely have the following concern: what did I do wrong? That first instinct – although likely well-founded in the human psyche – ends up being a statistically incorrect assumption. In fact, the most recent data from the CRA suggests that the majority of CRA Assessments are INCORRECT and are ultimately overturned on Objection.
This Tax Audits Series Report reflects on this data and its implications and “best practices” for taxpayers.
Tax professionals are well aware of how critical it is to file Notices of Objection on time — generally within 90 days of the mailing of a Notice of Assessment. For professionals and taxpayers who find themselves unable to have met this deadline, section 303 of the Excise Tax Act (the “ETA”) (and section 166.1 of the Income Tax Act) provides some potential relief (i.e., an extension to file, provided certain preconditions are met).
A recent Tax Court of Canada (“TCC”) decision inLamarnic & J Ltd. v. The Queen (2022 TCC 35) explores this rule but, at the same time, serves as a cautionary tale for taxpayers and tax professionals alike that these extension rules may only be available if the rules are strictly adhered to within set statutory timelines.
Last March 18th, the CRA announced the suspension of the vast majority of audit activities as a result of the COVID-19 pandemic. How quickly things change!
