A recent Tax Court of Canada decision examined the four-part test for when a taxpayer claims to have not received a notice of assessment.
The taxpayer sought an extension of time to object to the Minister of National Revenue’s (the “Minister”) July 25, 2016 assessment denying her application for the GST/HST New Housing Rebate, arising from her purchase of a residential condominium (the “condo”) in Toronto.
In 2015, she had granted her husband’s realtor power of attorney to fill out the original rebate application form on her behalf, in which he checked off the condo’s address as the mailing address on the form.
The taxpayer claimed that at the time the realtor completed the rebate documents, she and her husband expected their daughters to live at the condo, though they never did. She stated that the realtor did not check with her as to the mailing address and probably assumed that the condo would be the mailing address for the purposes of the rebate application. She also testified that the realtor may have given her a copy of the rebate application in 2015, but that she did not look at it until June 2018. She stated that she simply trusted him and that she did not understand the process.
In applying for the time extension, the taxpayer claimed that the Minister incorrectly sent the notice of assessment to the condo rather than to her home address. She argued that, as a result, she did not receive the notice until the end of July 2018.
The court set out the four-step process for situations involving an allegation that the income tax notice of assessment was never mailed, as established in a previous decision:
(1) the applicant must assert that the notice of assessment was not mailed or sent, whether at all or to the correct address;
(2) the Minister must introduce sufficient evidence to establish, on a balance of probabilities, that the notice of assessment was mailed or sent;
(3) if the Minister establishes that the notice of assessment was sent, then there is a rebuttable presumption that the day of sending is the date of the notice; and
(4) where the notice is sent by mail and the mailing date is established, the assessment is deemed to have been made on that date. The notice of assessment is also deemed to have been received on that date.
At the outset, the court noted that the notice of assessment was sent to the condo, which was the address checked off as the mailing address on the rebate application form. It found that this fact was sufficient to establish that the notice was sent to the correct address.
In addition, the court found that there was nothing in the evidence to suggest that her husband’s realtor acted beyond the scope of the power of attorney or that the wrong mailing address was identified on the rebate application form. The realtor used the power of attorney granted to him by the taxpayer to complete the rebate application form along with the other documents relating to closing the purchase of the condo.
The court found that the taxpayer’s lack of precision did not suggest dishonesty in this instance but, rather, a general lack of attentiveness to her own affairs such that deadlines would inevitably be missed.
The court concluded that the notice of assessment was sent to the correct address, being the condo.
Because the taxpayer acknowledged receiving the notice of assessment, the court found that step two of the process was satisfied.
The court found that because no evidence was submitted to challenge the presumption that the day of sending was the date of the notice (i.e. July 25, 2016), the notice of assessment was sent on July 25, 2016.
Finally, the court found that because the notice of assessment was mailed and the mailing date has been established as July 25, 2016, the notice was deemed to have been received by the taxpayer on the same date.
The court concluded that, since the mailing date was established as July 25, 2016, the time to object to the assessment had expired on October 24, 2016. The additional one year to apply for an extension of time to object had expired on October 24, 2017. Because no application for a time extension was made to the Minister by that date, the court dismissed the taxpayer’s application.
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