CRA Notice of Objection: How to Dispute a Reassessment Step by Step

If the CRA reassesses your tax return and you disagree, you have 90 days from the date on the Notice of Reassessment to file a Notice of Objection. This is a formal dispute filed on Form T400A (for individuals) or by letter, and it is your first legal right of appeal under ITA subsection 165(1). Missing the 90-day deadline does not end your options entirely, but the extension rules are strict and the window closes permanently after one year.

At Tohme Accounting, we file objections and represent clients through CRA disputes regularly. In our experience, the most common mistakes are filing too late, filing without requesting the CRA’s internal working papers first, and writing vague objections that give the Appeals officer no reason to change the assessment. A well-prepared objection with supporting documents has a real chance of success. A one-paragraph letter saying “I disagree” almost never works.

This guide walks through the full dispute process: from receiving a reassessment through the objection, the Appeals review, and if needed, the Tax Court of Canada.

What a Notice of Reassessment Means

A Notice of Reassessment is the CRA’s formal statement that it has changed your tax return. The CRA can reassess you for various reasons: an audit found unreported income, it denied a deduction or credit you claimed, it adjusted the cost base of an asset, or it applied a penalty under ITA section 162 or 163.

The reassessment replaces your original assessment. It shows the revised tax owing (or reduced refund), any interest charges calculated from the original filing deadline, and any penalties applied. The “date of mailing” printed on the reassessment is the date the 90-day clock starts.

Not every CRA letter is a reassessment. A “proposal letter” is a pre-assessment notice that tells you what the CRA plans to change and gives you a chance to respond before the reassessment is issued. If you receive a proposal letter, respond to it first. You may resolve the issue without needing a formal objection. Our team at Tohme Accounting can review the proposal letter and respond on your behalf before it becomes a reassessment.

A “Request for Information” during an audit is also not a reassessment. It is a document request that precedes any assessment decision. Responding fully and accurately to audit requests often prevents a reassessment from being issued at all.

The 90-Day Deadline and How to Extend It

You have exactly 90 days from the date of mailing on the Notice of Reassessment to file your objection. This is a hard deadline under ITA subsection 165(1). If you file on day 91, the CRA will reject your objection as late.

If you miss the 90-day window, ITA subsection 166.1 allows you to apply for an extension. You must apply within one year after the original 90-day deadline expired (so a maximum of approximately 15 months from the date of the reassessment). The application must explain why you were unable to file on time and demonstrate that you intended to object within the original period. The CRA has discretion to grant or deny the extension.

If the CRA denies the extension, you can apply to the Tax Court of Canada under ITA subsection 166.2 for an order granting the extension. The Tax Court hears these applications and can override the CRA’s decision.

After the one-year extension window closes, no further extensions are available. The reassessment becomes final. This is why we tell every client who receives a reassessment to contact us immediately. The 90 days pass faster than people expect, and once the deadline is gone, your options narrow significantly. If you have received a reassessment and the 90-day deadline is approaching, contact our team before it passes.

Request the CRA’s Working Papers First

Before you write your objection, request the auditor’s working papers. These are the internal documents the CRA used to arrive at the reassessment. They include the auditor’s notes, the calculations behind the adjustments, any third-party information the CRA relied on, and the sections of the ITA the auditor applied.

You have the right to request these under the Access to Information Act or informally through the auditor or their team leader. The informal route is faster. Call the number on the reassessment and ask for the audit file or T20 working papers. The CRA is generally cooperative with these requests, especially when a CPA makes the call on behalf of the client.

Having the working papers tells you exactly what the CRA’s position is and what evidence it relied on. Without them, you are writing your objection blind. You may be arguing against an assumption the auditor did not actually make, or you may be missing the one document that would resolve the dispute.

In our practice, requesting working papers before filing the objection is a standard step. It typically takes two to four weeks to receive them, which is well within the 90-day window.

How to File a Notice of Objection

You can file a Notice of Objection through three channels:

Online through My Account or My Business Account. Log in to the CRA’s online portal, navigate to “Register a formal dispute,” and follow the prompts. This is the fastest method and generates an immediate confirmation.

By mail using Form T400A. Complete the form, attach your supporting documents and a written explanation, and mail it to the Chief of Appeals at the tax centre that processed your return. Use registered mail so you have proof of the mailing date.

By letter. You can file by letter instead of using the T400A form. The letter must include your name, address, SIN (or BN for corporations), the tax year in dispute, the specific items you are objecting to, the facts and reasons for your objection, and the relief you are requesting.

Regardless of the method, the substance of the objection is what matters. The CRA’s Appeals Division will review the objection based on its merits, not on whether you used the right form.

What to Include in Your Objection

The quality of your objection determines whether it succeeds. A well-written objection addresses the CRA’s specific position, provides evidence, and cites the relevant tax law. A vague objection (“I disagree with the reassessment”) gives the Appeals officer nothing to work with.

Your objection should include:

1. The specific items in dispute. Identify exactly which lines or adjustments on the reassessment you are contesting. If the CRA denied three deductions but you agree with one of them, only object to the two you disagree with.

2. The facts. State the relevant facts clearly. What happened, when it happened, and what evidence supports your position. If the CRA denied a business expense, explain what the expense was, why it was incurred to earn income, and provide the receipt, invoice, or bank statement.

3. The legal basis. Cite the ITA section that supports your position. If the CRA denied a home office deduction, reference ITA subsection 18(12) and explain how you meet the conditions. If the CRA applied a gross negligence penalty under ITA subsection 163(2), explain why the penalty is not warranted (the “due diligence” defence requires showing you took reasonable care).

4. The relief requested. State specifically what you want: vacate the reassessment, reduce the amount assessed, remove the penalty, cancel the interest. Be explicit.

5. Supporting documents. Attach copies (not originals) of every document that supports your position: receipts, contracts, bank statements, T-slips, correspondence with the CRA, and any professional opinions.

At our firm, the objection letter is the document we spend the most time on. We review the CRA’s working papers, identify the auditor’s errors or unsupported assumptions, gather the client’s documentation, and draft an objection that gives the Appeals officer a clear path to overturning or modifying the reassessment. If you have a reassessment and are not sure how to build the objection, reach out to our team before the deadline.

What Happens After You File

Once the CRA receives your objection, it is assigned to the Appeals Division. Appeals is a separate unit from the audit team that issued the reassessment. The Appeals officer is supposed to conduct an independent review, though in practice they do rely on the audit file.

The CRA’s official target is to resolve objections within 180 days. The reality is different. Simple objections (a single denied deduction with clear documentation) may be resolved in 3 to 6 months. Complex objections involving multiple tax years, large amounts, or legal interpretation issues routinely take 12 to 18 months. Cross-border disputes and transfer pricing objections can take longer.

During the review, the Appeals officer may contact you (or your representative) to request additional information, discuss the issues, or propose a settlement. This is where having a CPA represent you makes a difference. The Appeals officer is a tax professional. If your representative can speak the same language (ITA references, case law, CRA administrative policies), the conversation is more productive.

You do not have to pay the disputed amount while the objection is pending. Under ITA subsection 225.1(1), the CRA cannot take collection action on the disputed amount until 90 days after the objection is resolved. Interest continues to accrue, however. If the objection fails, you owe the tax plus all accumulated interest.

The Appeals officer will issue one of three outcomes:

• Confirm the reassessment (the CRA’s position stands).
• Vary the reassessment (the CRA adjusts its position, partially in your favour).
• Vacate the reassessment (the CRA reverses it entirely).

If the CRA confirms or varies the reassessment and you still disagree, the next step is the Tax Court of Canada.

The Taxpayer Relief Program: A Parallel Track

While your objection addresses the tax itself (whether the CRA correctly applied the law), the Taxpayer Relief Program under ITA subsection 220(3.1) addresses penalties and interest. These are separate processes, and you can pursue both at the same time.

Under Taxpayer Relief, the CRA can waive or cancel penalties and interest in cases where the taxpayer was unable to comply due to extraordinary circumstances, CRA actions (delays, errors, incorrect information), or financial hardship. The request is made using Form RC4288.

A common strategy: file the objection on the substantive tax issue and simultaneously file a Taxpayer Relief request to cancel the penalties and interest. Even if the objection on the tax fails, you may get the penalties cancelled, which can be tens of thousands of dollars on a large reassessment.

If the CRA denies the Taxpayer Relief request, you can seek judicial review in the Federal Court (not the Tax Court). This is a different court with different rules, and the review is based on whether the CRA’s decision was “reasonable,” not whether it was correct.

We have filed Taxpayer Relief requests alongside objections many times. The Voluntary Disclosure Program is another path for penalty and interest relief, though it applies to undisclosed items rather than disputed reassessments.

Tax Court of Canada: When the Objection Fails

If the Appeals officer confirms or varies the reassessment and you believe the CRA is wrong on the law or the facts, you can appeal to the Tax Court of Canada. You have 90 days from the date of the CRA’s decision on your objection to file a Notice of Appeal.

The Tax Court has two procedures:

Informal Procedure (for disputes under $25,000 in federal tax per year, or losses under $50,000). No lawyer required. The rules of evidence are relaxed. The hearing is shorter and less formal. You can represent yourself, though having a CPA or tax lawyer present your case improves your chances.

General Procedure (for disputes above those thresholds). Formal litigation with discovery, document production, and a full trial. Legal representation is strongly recommended. Costs can run from $10,000 to $50,000+ depending on the complexity.

The Tax Court renders a binding decision. If either side disagrees, they can appeal to the Federal Court of Appeal, and from there (in rare cases) to the Supreme Court of Canada.

Most disputes resolve before reaching Tax Court. The objection and Appeals process handles the majority of cases. But knowing that Tax Court exists, and being prepared to go there, gives you a stronger negotiating position during the Appeals stage. The CRA is more likely to settle when they know the taxpayer has professional representation and is willing to litigate.

How Much Does CRA Dispute Resolution Cost?

Professional representation through the objection process typically costs between $2,000 and $10,000, depending on the complexity of the dispute and the amount of documentation involved. Simple objections (a denied deduction with clear receipts) are on the lower end. Multi-year disputes with multiple issues run higher.

Compare these fees to the amount in dispute. A $3,000 objection fee to contest a $25,000 reassessment is worth it. A $15,000 legal bill to contest a $5,000 adjustment usually is not, unless a principle is at stake that affects future years.

At Tohme Accounting, we give clients an upfront estimate of what the objection will cost and an honest assessment of the chances of success before starting work. There is no value in fighting a reassessment the CRA will win.