Most of us get an abundance of emails daily that can range from work emails, spam, newsletters, etc. With so much information making its way into our inboxes everyday it can be easy to miss a few important emails once in a while.
According to Advisor.ca doing this can be costly; especially if you miss an email from the Canada Revenue Agency (CRA). When CRA sends you an email they will automatically assume you have received it unless proven otherwise.
A recent tax case (DiPierdomenico v. The King, 2023 TCC 146) that took place in September dealt with a taxpayer who claimed to have never received various CRA notices dealing with reassessments for multiple tax years.
This taxpayer works at Canada Post mail and owns a nail salon. The CRA audited the salon business and the taxpayer was sent notices of reassessment for his 2011, 2012, 2013, 2015 and 2016 tax years. He did not file notices of objection in time to challenge those reassessments, and he also missed the deadlines to apply to extensions.
As per the Income Tax Act, the deadline for an individual taxpayer to file an objection is one year from the normal filing due date or 90 days after the date printed on the notice of reassessment, whichever is later.
In this recent case, the CRA testified that on July 4, 2016, it sent notices of reassessment by mail to the taxpayer for the 2011, 2012 and 2013 tax years. The taxpayer claimed to have never received them once he retained an accountant in 2019. The accountant, who represented the taxpayer in court, filed an application on June 9th, 2022 for a time extension to object to those reassessments.
The taxpayer testified that CRA correspondence was “sporadic at best” but was unable to produce copies or records of any such correspondence. The taxpayers argument was that he simply did not receive the notices of reassessment.
The judge wondered if the taxpayer had received any mail from CRA or other senders. After confirming that the taxpayers correct address was on file and because he had objected to each of the reassessments, he must have received them. Therefore the judge said that the taxpayers’ allegation “lacked any factual foundation, which was strange, particularly as the [taxpayer] himself is a mail carrier.”
Though the taxpayer did file for a notice of objection, it wasn’t filed until January 2017 which was well beyond the 90-day deadline. The CRA wrote to the taxpayer a week later informing him that the objection was not valid as it was late. “The letter went on to say that the taxpayer had one year from the expiration of the 90-day period to apply to the CRA for a time extension to serve a notice of objection.” – The Consequences of missing – or ignoring CRA mail written by Jamie Golombek.
Even though the taxpayer eventually filed an application for an extension of time with CRA, he waited until May 2018, which was beyond the one-year extension period (which expired on Oct. 3, 2017).
In conclusion, the taxpayer failed to file applications for extensions by their respective deadlines. The judge ruled that the Tax Court will not grant the extensions requested for all five years under the reassessment. Thus, the taxpayer was effectively precluded from disputing any of those assessments. A costly mistake – all because he missed (or ignored) an email from CRA.
If you have any questions or concerns, please don’t hesitate to contact us.
Have a great weekend,
Tracey and Paige
Original Article: https://www.advisor.ca/tax/tax-news/tax-court-case-shows-consequences-of-missing-or-ignoring-cra-mail/
Photo by Brian J. Tromp on Unsplash