CRA Collections and Taxpayer Disputes During the Pandemic

In response to the COVID-19 pandemic, the Canada Revenue Agency (“CRA”) has deferred various measures with respect to collections, audits, and objections. The CRA’s most up-to-date administrative policies on these matters can be found here, but are summarized below, as of April 8, 2020.

Collections

The CRA has stated that “collections activities on new debts will be suspended until further notice, and flexible payment arrangements will be available.” A “new debt” presumably includes an amount that became owing as of March 18, 2020, when the Government of Canada’s COVID-19 Economic Response Plan was announced. Pre-existing situations will be addressed by the CRA on a case-by-case basis to prevent financial hardship.

Audits

Audits that are currently underway are generally temporarily suspended, other than “high risk and exceptional cases” or high risk GST/HST refund claims that require some level of contact with the taxpayer before they can be paid. Also, as of March 18, 2020, the CRA will generally not initiate new GST/HST or income tax audits of small or medium businesses for a period of four weeks.

Objections

The CRA has identified pending objections related to taxpayers’ entitlement to benefits and credits as a critical service, and such objections will continue to be processed during the pandemic. The CRA does not expect delays associated with processing these objections.

Pending objections related to other matters are currently being held in abeyance and no collection action will be taken with respect to associated accounts.

Typically, a taxpayer’s deadline to file a Notice of Objection is the later of: (a) one year after the taxpayer’s filing due date for the year; and (b) 90 days after the issuance of the Notice of Assessment, Notice of Reassessment, or Notice of Determination. However, for objections that are due between March 18, 2020 and June 30, 2020, the CRA is extending the deadline to June 30, 2020. As a result, for objections due during this period, the CRA will exercise its discretion to extend the time for a taxpayer to file an objection to June 30, 2020, without the taxpayer having to apply for the extension. Taxpayers should endeavour to file their objection in advance of this extended deadline in case there is a disruption in postal or courier services.

A taxpayer who has not filed a Notice of Objection that was due before March 18, 2020 should apply for an extension of time to file their objection as soon as possible, as the CRA does not have discretion to grant an extension if the request is made more than one year after the original deadline.

The foregoing information provides only an overview of the CRA’s administrative policies regarding collections, audits, and objections as of the date this information has been provided. Specific legal advice should be obtained. If you have questions in the above regard, please contact Alanna Mar at 613-566-2273 or [email protected].