After a Denied Objection: Next Steps to Appeal or Settle with CRA

A denied Notice of Objection can feel like the end of the road — but it isn’t. CRA Appeals rejecting your objection does not mean you’re wrong, and it does not mean the reassessment is final. Many valid cases are denied at the Appeals stage due to incomplete evidence, misinterpretation of facts, auditor bias, or failure to understand complex financial issues such as real estate, crypto, GST/HST, payroll, or net-worth calculations. This guide explains exactly what to do after CRA denies your objection, your legal rights, the timelines involved, and how to continue the fight through the Tax Court of Canada or strategic settlement.

Why CRA Denies Objections

CRA Appeals may deny objections when:
evidence is incomplete or disorganized
CRA assumptions were not properly challenged
the taxpayer did not respond to requests
complex issues were misinterpreted
Appeals relied heavily on the auditor’s findings
arguments lacked legal references
the objection letter was vague or emotional
denied objections are extremely common — especially for self-represented taxpayers.

Step 1: Read the Notice of Confirmation Carefully

CRA will issue a:
Notice of Confirmation = CRA upholds the reassessment
Notice of Variation = CRA changes part of it but still disagrees
This is your signal to escalate the dispute. The confirmation letter also triggers your 90-day deadline to appeal to the Tax Court.

Step 2: Identify Why the Objection Failed

A CPA must analyze:
CRA’s reasoning
audit assumptions
Appeals Officer’s notes
missing documents
misapplied law
CRA often denies objections simply because they were not presented strongly enough.

Step 3: Decide Whether to Appeal to the Tax Court

Tax Court is fully independent of CRA and far more fair in cases involving:
real estate flipping disputes
capital vs business income disputes
GST/HST ITC denials
crypto ACB calculations
rental income reassessments
vehicle and home-office claims
foreign income and T1135 penalties
net-worth audits
gross negligence penalties
Many taxpayers win cases in Tax Court that CRA Appeals previously denied.

Step 4: Understand Your Tax Court Deadlines

You must file a Notice of Appeal within:
90 days of the Notice of Confirmation
OR
One year + 90 days from the original reassessment if Appeals never responded
Missing these deadlines eliminates your right to dispute the decision entirely.

Step 5: Choose the Appropriate Tax Court Procedure

Informal Procedure

For disputes under $25,000 per tax year (or $50,000 for GST/HST).
Simpler, faster, less formal.

General Procedure

For larger or more complex cases.
Includes discovery, examinations, evidentiary hearings, and detailed legal arguments.

Step 6: Strengthen Your Case for Tax Court

Tax Court requires:
organized documents
bank deposit reconciliations
crypto ACB calculations
rental expense summaries
vehicle mileage logs
GST/HST ITC packages
loan and gift documentation
expert accounting analysis
legal arguments
A weak objection can still win in Tax Court if rebuilt properly.

Step 7: Consider Settlement Options

CRA Legal may negotiate settlement when:
evidence contradicts auditor assumptions
taxpayer presents a stronger case
errors in audit methodology are found
partial agreements reduce risk for both sides
Most cases settle before trial.

Step 8: If You Choose Not to Appeal

You may still:
negotiate a payment plan
request Taxpayer Relief for penalties/interest
correct bookkeeping
avoid future audits
But the reassessment becomes legally binding once the deadline passes.

Why Many Denied Objections Succeed in Tax Court

Tax Court judges are independent and often overturn CRA positions when:
CRA relied on assumptions
CRA ignored evidence
audit methodology was flawed
CRA misapplied the law
CRA exaggerated personal living expenses
CRA misunderstood crypto or real estate
Appeals Officers rarely have specialized industry experience — Tax Court judges and expert witnesses do.

Examples of Cases Worth Appealing

crypto wallet transfers treated as income
assignment sale profits classified as business income
vehicle expenses denied without proper review
foreign gift treated as taxable income
GST/HST ITCs denied due to missing invoice details
rental expenses treated as capital instead of current
director’s liability incorrectly assessed
These often win at Tax Court.

When to Accept the Decision Instead of Appealing

Appealing may not be worthwhile when:
tax owing is small
documentation is missing and cannot be reconstructed
legal fees exceed benefit
CRA’s reassessment is factually correct
In these cases, focus on payment arrangements or relief requests.

Mackisen Strategy

At Mackisen CPA Montreal, we analyze denied objections, determine appeal strength, reconstruct evidence packages, prepare Tax Court filings, negotiate settlements with CRA Legal, and challenge CRA’s assumptions using expert accounting analysis. We ensure no taxpayer accepts a reassessment unless it is truly justified.

Real Client Experience

A Montreal crypto trader won in Tax Court after CRA assumed wallet transfers were income. A real estate investor overturned a flip classification through expert evidence. A contractor reversed denied vehicle expenses after presenting structured logs. A business owner settled a GST audit at 40% of the original assessment after strong negotiation.

Common Questions

Is a denied objection final? No — Tax Court is the next step. Is Tax Court expensive? Often less than paying an incorrect reassessment. Do most cases settle? Yes. Can I appeal myself? Risky. What if the deadline is missed? The reassessment becomes binding.

Why Mackisen

With more than 35 years of combined CPA experience, Mackisen CPA Montreal ensures taxpayers never accept unfair CRA decisions. We guide clients from denied objections to successful appeals with evidence-driven strategy and expert representation.