Feigenbaum Law

The CRA and Tax Court During COVID-19

Litigation
Personal Tax Planning
Tax Disputes & Litigation
April 3, 2020

The current health crisis related to the spread of the coronavirus has created challenges and delays in a number of areas, at the height of the tax season in both Canada and the U.S. Many Canadians are left unsure of their obligations with respect to filing taxes in Canada, and when those filings will be assessed. Further, those facing scrutiny of current and past tax filings are no doubt wondering how these delays will impact their situations and what they can expect in terms of timing.

In last week’s blog, we looked at some of the tax relief and other areas of support being made available to Canadians as a result of COVID-19. Today, we would like to spend some time explaining what options are available to people undergoing audits or disputes with the Canada Revenue Agency during the crisis.

Audits

The CRA has announced that it will be pausing all audit activity until at least the middle of April. It remains to be seen whether this will be extended or not. The audit suspension applies to both GST/HST audits as well as audits for income tax. The CRA has indicated, however, that interaction with taxpayers in high-risk and exceptional cases will continue. Aside from those exceptions, people can expect the following:

  1. No new audits should be launched;
  2. No requests for information relating to existing audits should be issued;
  3. No existing audits should be finalized; and
  4. And no reassessments should be issued.

Collections

In addition to halting audit activities, the CRA has also announced that “collections activities on new debts will be suspended until further notice and flexible payment arrangements will be available.” The CRA has not been clear on what constitutes a “new debt,” but they did state that collections staff will address pre-existing situations on a case-by-case basis to prevent financial hardship wherever possible.

The CRA’s debt management call centre is currently closed. However, they noted in the same statement that people unable to pay taxes in full should reach out to make payment arrangements. It is not clear whether payment arrangements can be made at this time or only when operations resume. Those with an urgent situation can call 1-800-675-6184 to speak to a CRA representative.

Tax court

The Tax Court of Canada has stated that all sittings and conference calls scheduled between March 16 and May 1, 202 have been cancelled. The court will assess the situation on April 14 to determine if events scheduled after May 1 need to be rescheduled or cancelled.

In addition, the period between March 16, and May 1 will be excluded from the computation of time under the Tax Court of Canada Rules. All other Rules made under the Tax Court of Canada Act governing the conduct of matters that, pursuant to section 12 of the Act, are under the Tax Court of Canada’s jurisdiction or an Order of Direction of the court.

Other courts have announced adjustments as well. The Supreme Court of Canada stated that hearings scheduled for March, April, and May have been adjourned tentatively until June. However, the court does plan to continue to release judgments during this time. The Federal Court of Appeal has also stated it will be suspended until at least April 17.

At Feigenbaum Law, we provide expertise in the U.S. and Canadian tax law. We will continue to update our readers with how the tax situation both in Canada and the United States is evolving during the COVID-19 crisis. Please check back here weekly for the latest. In the meantime, please call us at 1-877-275-4792 or reach us online for any questions related to your tax law issues.


Tagged: coronavirus, COVID-19, income tax, tax disputes