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You’re an accountant preparing tax returns for your clients. One of your clients has received a...

You’re an accountant preparing tax returns for your clients. One of your clients has received a letter from CRA indicating their tax return has been reassessed. Your client does not agree with CRA's decision. What can the taxpayer do and when must they do it?

- 2017 Tax Return was Reassessed

- Date of Original Notice of Assessment for 2017 Return is May 10, 2018

- Date of New Notice of Reassessment for 2017 Return is Oct 1, 2018

- The taxpayer has income from a sole proprietorship

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Answer #1

CRA can reassess a tax return at any time for three years from the date on the notice of reassessment. If the taxpayer has committed a fraud and/ or there was a misrepresentation on the tax return, the CRA reassessment period may be extended.

If the taxpayer does not agree with the CRA's decision to reassess his return, then he must first call the CRA and try to solve the matter. If the taxpayer is not satisfied even after speaking with the CRA he should file an objection (T400A) and mention the reason for filing the objection and present relevant facts and documents. If the client disagrees with CRA's ruling on it's objection it can appeal to the Tax Court of Canada.

The taxpayer needs to file an objection within 90 days from the date of the notice of reassessment.

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