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Dealing With The CRA

The Canada Revenue Agency (CRA) is responsible for the administration and enforcement of Canada’s federal tax laws, including the Income Tax Act, as well the personal income tax legislation of the provinces, with the exception of Quebec.

The CRA’s audit division employs more than 9,500 tax auditors and other officials and annually conducts more than 350,000 audits of small and medium-sized businesses.  In 2006/2007, those audits resulted in more than $2.5 billion in additional taxes, interest, and penalties being assessed.

     -Canada Revenue Agency’s Annual Report to Parliament 2006/2007

The CRA’s appeals division employes more than 1,400 officers and annually, they handle more than 85,000 objections and disputes.  On average, it takes the CRA’s Appeal Division 107 days to deal with an income tax objection and 171 days to deal with a GST/HST objection.

     -Canada Revenue Agency’s Annual Report to Parliament 2006/2007

The federal Department of Justice’s Tax Law Services Section employs more than 250 tax lawyers who provide legal advice and assistance to the Canada Revenue Agency and who represent the CRA before the Tax Court of Canada.

Things you should keep in mind in dealing with the CRA.

  • Advice you receive from the CRA over the telephone or in person is not binding.  That means that if a CRA official provides you with advice related to your taxes and that advice turns out to have been incorrect, you are still legally responsible for paying any resulting taxes, interest, or penalties.
  • If you are audited and reassessed by the CRA, the CRA is not responsible for paying for any of your accounting or legal fees, even if you successfully challenge and reverse the reassessment.  The only time the government might be responsible for paying such fees is if you appeal the reassessment to the Tax Court of Canada, you are successful, and the Court orders the Crown to pay you “Costs”.