So, you’ve filed your tax return and now have a problem. Perhaps you’ve made a mistake, or disagree with the Notice of Assessment that the Canada Revenue Agency (CRA) has sent to you. What next?
File an adjustment if necessary.
Maybe you’ve filed your tax return for 2018 and now realize that you forgot a deduction or credit, reported or claimed an incorrect amount, found more receipts, missed a slip or otherwise need to change what you filed with the taxman.
Making an adjustment to your tax return can be done in two ways: Online or by mail. If you want to make your adjustment online, you can use the CRA’s ReFile service, which is available in the tax software that was used to prepare your return. Alternatively, you can make an adjustment online with the Change My Return service available on the CRA website. To use this latter method, you will have to sign up for My Account with the CRA – which you should do if you haven’t yet. My Account allows you to access all kinds of important information related to your tax filings, and to make changes and submissions to the CRA electronically.
Before you request any adjustments to your tax return, make sure you’ve received your Notice of Assessment for the year. Keep in mind that you’ll have to file a separate adjustment request for each tax year that you want to change. Also, you can only make adjustments to returns for any tax year ending in the past 10 years (so, if you request an adjustment in 2019, you can go back as far as your 2009 tax return – but not earlier).
If you meet certain (less common) conditions, you may not be able to make your adjustment electronically using Change My Return or the ReFile service. Check out those conditions on the CRA website by searching those terms online at cra.gc.ca.
If you can’t file your adjustment electronically, or simply would rather mail the adjustment to the CRA, then use Form T1-ADJ, T1 Adjustment Request, and send it to your tax centre (either Winnipeg, Sudbury or Jonquière, Que.; look up your proper tax centre on the back of the form). You’ll need to file a separate Form T1-ADJ for each tax year, and you’ll need to include hard copies of any supporting documents (slips, receipts, etc) with your request if you file by mail.
You can expect a response from the CRA within two weeks if made electronically, and within eight weeks if by mail. The taxman may either accept your request, ask for more information or deny it.
Fight your assessment if you’re right.
What if the CRA assesses your tax return differently than you expected? Maybe a deduction was disallowed, or some other change was made to your tax return that you disagree with. Your first line of defence should be to call the CRA and speak to the area responsible for issuing your assessment. If you received a letter from the agency explaining the changes to your tax return, there will be number to call on that letter. If all you’ve received is your Notice of Assessment, then start with the 1-800 number on that assessment. It may be possible to resolve your issue by phone.
If this gets you nowhere, then you should consider filing a Notice of Objection. First, let me suggest that if the issue you’re fighting is complicated in any way, you’d be wise to hire a tax professional to file the objection for you. The reason? You’ll want to file your objection right the first time, and if you lose the battle at this stage, you may want to file a Notice of Appeal next. You’ll want to make sure that your previous submissions to the CRA don’t jeopardize success at the Notice of Appeal stage – which can happen. A tax pro with experience in objections and appeals is critical if your issue is at all complex.
You can file your Notice of Objection online by going to My Account and clicking on “Register My Formal Dispute.” Alternatively, you can file your objection by mail, by sending a written submission using Form T400A and supplementing this with a letter attached, if necessary, which should detail the facts of your situation, your reasons for objecting, and your requested reassessment.
Keep in mind that individuals have to file a Notice of Objection within 90 days after the date on the CRA’s Notice of Assessment, or one year after the due date of the tax return in question, whichever is later.
If your Notice of Objection is denied by the CRA, there’s an appeals process that could mean a trip to court – but that’s a topic for another day.
Tim Cestnick, FCPA, FCA, CPA(IL), CFP, TEP, is an author, and co-founder and CEO of Our Family Office Inc. He can be reached at firstname.lastname@example.org.