Deadlines Have the Word “dead’ in Them for A Reason

Today the Tax Court of Canada (“TCC“) issued a decision addressing an issue that I often like to rant about: tax deadlines!

In the matter of 2544375 Ontario Inc. v. The King (https://decision.tcc-cci.gc.ca/tcc-cci/decisions/en/item/521182/index.do) Docket 2019-3295(GST)G, the TCC once again reminded taxpayers that the deadlines in the Excise Tax Act (just as they are in the Income Tax Act) are set in stone. There is zero discretion for the court to take into account the merits of the case if any of the deadlines are missed.

In this case, the corporation had its GST claims for credits rejected. However, the corporation did not object in a timely manner; i.e. within 90 days of receiving the notice of reassessment. This was no fault of the business-owner, it was the former accountant for the business that did not act quickly enough. Then the new bookkeeper, acting like a reasonable person, called and wrote the CRA asking how to deal with the situation. Her letters clearly set out all of the facts and reasons why the assessment was wrong and asked the CRA how to move forward but did not contain the magic words “I/We object”. Therefore, the letters did not qualify as a properly filed request for an extension of time to file an objection. The ultimate deadline (one year after the initial 3-month deadline, or 15 months after the date on the reassessment) passed before the new bookkeeper found out that they had to file a request for an extension of time to object. Then the deadline passed for the filing of an appeal to the TCC to reconsider the CRA’s rejection of the request to file an extension of time to object was also filed too late and out of time. The corporation’s position was that it was impossible during COVID to get anyone on the phone at the CRA, nor could anyone get any sort of written answer from the CRA to find out how to object out of time and how to move the matter forward. While this seems like a reasonable position, the TCC basically said ‘Too bad, so sad’ and that there are more than enough professionals out there who do know what to do and the corporation should have asked someone else other than the CRA.

The point of this story is a familiar rant of my mine with regard to deadlines at the TCC. We see these cases come across our desk with a depressing frequency. People ask us to help, but they are out of time, they have no rights, and they have to pay tax they do not really owe on the merits, or go bankrupt. Just because the CRA was not responding to calls or letters for two plus years does not change the fact that the deadlines are set in stone and you are supposed to know this. And now you do.