Section 301

CRA confirmed that where an appeal of the builder against a CRA assessment under s. 191(3) (showing an increased FMV of a new multiple unit residential complex at the time of first occupancy) resulted in that assessment being reduced or vacated, CRA has the authority (without regard to the usual time limitation periods) under s. 298(6) to make a consequential reassessment to reduce the builder’s new residential rental property (“NRRP”) rebate (which also is affected by the building’s FMV).

CRA further noted that if the NRRP rebate had also been reassessed (based on the increased FMV) at the same time as the assessment under s. 191(3), the builder was not expected to have objected to both assessments rather than only having objected to the s. 191(3) assessment. It stated that on the reassessment to reduce the s. 191(3) assessment:

[T]he amount of a related NRRP rebate would be similarly reassessed without the need to file a separate objection specifically with respect to the rebate.

One statement of facts may be used for multiple objections

16. If a person is objecting to more than one assessment, a separate Notice of Objection must be filed for each disputed assessment. If the facts and reasons for the objections are identical for more than one assessment, this may be indicated on each Notice of Objection and one statement of facts may be submitted.

1. If a taxpayer is objecting to multiple Notices of Assessment, where the same issues are raised, will CRA accept a single Form GST159 with the relevant Notices of Assessment that are being objected to and the applicable facts and reasons and exhibits all enclosed?
2. “Notice Nos.” are sometimes issued for each month assessed. Can they be included instead on a separate attached sheet along with the statement of facts and reasons?

CRA responded

1. The CRA confirms that it will accept a single Form GST159 to be filed for multiple assessments under objection. To enable us to determine the validity of the objection, it is important that the periods covered and the information on the assessments (notice number and date) be properly identified on the Notice of Objection. If there is insufficient space on the form, a separate sheet can be attached. …
2. Whenever there is insufficient space on the Notice of Objection form to provide facts and reasons for the objection or the assessment information, you can always attach a separate sheet(s). …

Federal SLFI objection

You or your authorized representative can file an objection by filling out Form GST 159, Notice of Objection (GST/HST), and sending it to the Intake Centre identified on the back of the form. …

Quebec SLFI objection

Effective January 1, 2013, the CRA administers the QST applicable to SLFIs. If you think we have misinterpreted the facts or applied the law incorrectly, you have the right to object to assessments of the QST. Filing an objection is the first step in the formal process of resolving a dispute. The time limit for filing an objection is 90 days from the date on the notice of assessment.

You or your authorized representative can file an objection by filling out Form RC375, Notice of Objection (QST) for Selected Listed Financial Institutions, and sending it to the Intake Centre identified on the back of the form.

S. 301(4) does not limit right to object to an issue raised in a reconsideration assessment under s. 301(3)

20. In accordance with subsection 301(1.5), where a person has filed a Notice of Objection to an earlier assessment and the Minister makes a particular assessment under subsection 301(3) … [under s. 301(3)] as a result of the Notice of Objection, subsection 301(1.4) does not limit the right of the person to object to the particular assessment in respect of an issue that was part of the particular assessment and not part of the earlier assessment.

Objector is informed of dialogue between Appeals and Audit

24. To ensure that the reasoning behind the assessment under objection is understood and to provide an open exchange of information, documents pertaining to the issues in dispute are offered to the person at the outset of the objection stage. In addition, the person is informed of discussions held between the appeals officer and the assessing area about the disputed assessment.

Adjustment on appeal can include an upward reassessment

26. Once a decision respecting the assessment is made, the person objecting is advised of one of the following results:

• The assessment may be vacated. …
• A reassessment may be made. This means that the objection is allowed in whole or in part, and the amount assessed is adjusted. This occurs where the Minister decides that the person is correct on all points or on some points raised in the objection.
• The assessment may be confirmed. …
• An upward reassessment may be made. An upward reassessment occurs when an objection is resolved that results in either an increase to the disputed GST/HST collectible or a decrease to the disputed ITCs or rebate.

Where a builder objects to a reassessment that is based on the determination of a higher FMV of the property, in what situations, if any, would the Appeals Directorate increase the reassessment further based on a higher FMV determined by another CRA appraiser during the objection process? CRA responded that s. 301(3) “allows an Appeals Officer to exercise their judgement to make an upward adjustment with respect to a matter under dispute, or a related matter within the same period under objection, where the matter is of relative importance, including being in relation to the FMV of a disputed property” – and also indicated that “[a]ny upward adjustment must be approved by the Appeals Officer’s manager or the Chief of Appeals.”

(a) Where additional documentation becomes available after an objection is with the appeals officer, must that officer review and analyze the additional documentation, or should it be sent to Audit for review and, if so, to the original auditor – and does the taxpayer have a say?

(b) If the appeals officer has a discretion whether or not to review significant additional documentation, how should this discretion be exercised?

(c) If there is a further review by Audit, is Appeals required to share this second report on the supplemental documentation with the taxpayer?

CRA responded:

(a) … Upon receipt of the additional information/documents from a taxpayer, Appeals will review the documents and determine whether further audit work, examination or analysis is required. If audit assistance is required, a referral will be addressed to the responsible TSO. Once a referral for an objection has been received, Audit will advise the appeals officer of the name of the auditor who has been assigned the review and will establish a reasonable timeframe for completing the review.

(b) In situations where specific documents or information was requested by the auditor, but only provided by the taxpayer at the objection stage, the appeals officer is required to make a referral to audit … [although] the GST/HST Refund Integrity Program is excluded from this mandatory referral process … .

Situations where a referral to Audit is discretionary include, but are not limited, to:

• Where the net tax was estimated due to insufficient books and records;
• Where the input tax credits were disallowed as the accounting records and/or documentation were not provided;
• Where the new information provided for review is substantial;
• Where an on-site visit is warranted to verify certain facts provided by the taxpayer;
• Where the objection relates to an initial assessment concerning issues of prior years' returns currently being considered by Audit.

(c) Where an appeals officer makes a referral of an objection to Audit, Appeals will advise the objector or authorized representative that their file has been referred back to Audit and will assure them that the decision on the review will be the responsibility of Appeals. Appeals will conduct a follow-up every 30 days with the auditor. Upon receipt of audit findings, Appeals will review and consider the recommendation from Audit and will discuss it with the objector or authorized representative. Appeals may share the second auditor’s report addressing the submission of the supplemental documentation with the taxpayer, if requested, so the taxpayer can address any concerns.

Regarding its policy regarding requests under s. 301(4) for the Minister to waive reconsideration of an objection, CRA stated:

On receipt of [such] a request … the case will be assigned and reviewed at the earliest opportunity. The Minister will only confirm an assessment under subsection 301(4) in those exceptional circumstances where the Agency wishes to resolve a controversial issue in court. In considering the objector’s request, the CRA will review and consider the following criteria before deciding whether to confirm under subsection 301(4):

1. If there is complete information on file concerning the disputed issue;
2. If the assessment is correct in all aspects;
3. If the objector indicates agreement to all of the facts on which the assessment was based; and
4. If the disputed issue is a question of law which the Agency wishes to resolve in the courts. Headquarters Appeals may be consulted on the waiver request depending on the impact or sensitivity of the case.

… If the request is not granted, the objector will receive a letter advising them of the decision and the case will proceed to be reviewed with the other GST/HST objection workload.

Where there is a concurrent QST matter in dispute on the same issue which precedes the GST/HST case, the QST matter may be placed on hold for coordination.