Handling a CRA Reassessment or Notice of Objection

Introduction
Handling a CRA reassessment or notice of objection is one of the most critical steps a taxpayer can take to protect their rights and prevent unnecessary tax, penalties and interest. When CRA or Revenu Québec disagrees with a return—whether related to income, GST/HST, QST, payroll, real estate, business expenses or benefits—they issue a Notice of Reassessment. Taxpayers then have the legal right to challenge the decision by filing a Notice of Objection within strict deadlines. A reassessment does not mean CRA is correct. Many reassessments are overturned, reduced or amended when challenged properly. This guide explains exactly how to handle a CRA reassessment or notice of objection professionally and effectively.

Legal and Regulatory Framework
Handling a CRA reassessment or notice of objection is governed by:

• the Income Tax Act
• the Excise Tax Act (GST/HST)
• the Tax Administration Act (Québec)
• CRA’s dispute resolution policies
• Revenu Québec’s objection and appeal system
• Tax Court of Canada rules

A reassessment occurs when:

• CRA changes your tax return
• CRA denies deductions or credits
• CRA adds income or taxable benefits
• GST/HST ITCs are denied
• payroll deductions were incorrect
• Revenu Québec challenges provincial filings

A Notice of Objection allows taxpayers to dispute the reassessment.

Step 1: Read the Reassessment Carefully

The first step in handling a CRA reassessment or notice of objection is understanding:

• what CRA adjusted
• why CRA made the adjustment
• which tax years are affected
• how much tax, interest or penalties were added
• which documents CRA relied on
• whether additional audits may follow

Reassessments often include misunderstandings or incomplete information.

Step 2: Understand the Filing Deadlines

Deadlines for filing a Notice of Objection:

• 90 days from the date on the Notice of Reassessment
OR
• 1 year after the filing deadline for that return — whichever is later

Québec (Revenu Québec) has similar 90-day objection deadlines.

Missing deadlines drastically reduces your legal options.

Step 3: Gather Evidence and Documentation

Handling a CRA reassessment or notice of objection requires strong supporting evidence:

• receipts, invoices, contracts
• bank statements, e-transfers
• mileage logs
• GST/HST invoices and ITC proof
• financial statements
• emails and correspondence
• real estate closing documents
• payroll records
• medical or tuition receipts
• business plans
• proof of residency for real estate claims

CRA decisions can often be overturned with proper documentation.

Step 4: Prepare and File a Notice of Objection

The Notice of Objection must:

• explain why CRA is wrong
• provide factual evidence
• reference tax law and case law when appropriate
• be structured clearly and professionally

For federal objections, file using:

• CRA My Account
• CRA My Business Account
• Form T400A (paper)

For Québec objections, file through:

• Revenu Québec’s objection portal
• Form MR-93.1

This is the most important step in handling a CRA reassessment or notice of objection.

Step 5: The Appeal Division / Appeals Officer Review

Once filed:

• the objection goes to CRA’s Appeals Division
• an Appeals Officer is assigned
• CRA must review your evidence independently from the auditor
• additional documents may be requested
• negotiations may occur
• interest continues to accumulate, but enforcement pauses

Many reassessments are reduced or cancelled at this stage.

Step 6: If Unresolved — Appeal to Tax Court of Canada

If CRA denies the objection or issues an unfavourable decision (Notice of Confirmation):

• taxpayers may appeal to the Tax Court of Canada
• two tracks: informal (under $25,000) or general procedure (larger cases)
• taxpayers can represent themselves or hire legal counsel

For Québec, appeals go to the Court of Québec.

Handling a CRA reassessment or notice of objection may require escalating to court when CRA is unreasonable.

Key Court Decisions

Courts have consistently held:

• taxpayers must provide evidence for deductions
• CRA cannot assume income without justification
• CRA must explain reassessment assumptions
• taxpayers may challenge unreasonable audit positions
• procedural fairness must be respected
• real estate cases require proof of intent and occupancy
• GST/HST ITCs are allowed only with proper documentation

Québec courts also confirm that ARQ cannot deny claims arbitrarily.

These decisions highlight why strong objections succeed.

Why CRA and ARQ Issue Reassessments

Reassessments often arise from:

• missing documentation
• inaccurate filings
• GST/QST discrepancies
• real estate flipping or assignment issues
• payroll errors
• unreported income (bank deposits, platforms)
• business-use-of-home errors
• high vehicle or travel claims
• T4/T5 mismatches
• crypto transactions
• lifestyle audits

Understanding why a reassessment occurred is key to handling a CRA reassessment or notice of objection effectively.

Mackisen Strategy

Mackisen CPA provides a complete dispute-resolution system:

• reviewing the reassessment for errors
• reconstructing missing documentation
• drafting strong Notice of Objection submissions
• referencing tax law, CRA policy and court decisions
• negotiating with Appeals Officers
• requesting fairness relief for penalties and interest
• managing Revenu Québec objections and appeals
• preparing for Tax Court when necessary
• coordinating with legal counsel for complex cases

This professional approach dramatically increases the chance of reversing unfair reassessments.

Real Client Experience

Examples of how Mackisen resolved reassessments:

• A consultant was reassessed for unreported PayPal income. We reconstructed records, filed an objection and removed most of the reassessment.
• A Québec investor had the New Housing Rebate denied. Mackisen provided occupancy proof and won the objection.
• A self-employed worker had vehicle expenses denied. We prepared mileage evidence and overturned CRA’s position.
• A corporation faced payroll penalties for QPP/QPIP mistakes. We objected successfully and reduced interest.
• A real estate flipper was reassessed as business income instead of capital gains. Mackisen negotiated a favourable settlement.

These cases show why expert representation matters.

Common Questions

• Do I have to pay the reassessed amount immediately?
No—collection is paused when an objection is filed (except source deductions).

• Can I object to just part of the reassessment?
Yes.

• What if I miss the 90-day deadline?
You can request an extension but must justify it.

• Does objection guarantee a reversal?
No—but strong evidence improves your chances.

• Does interest stop during objection?
No—interest continues unless you win later.

• Does ARQ follow the same process as CRA?
Similar, but with stricter review standards.

Why Mackisen

With more than 35 years of combined CPA experience, Mackisen CPA Montreal helps taxpayers challenge unfair tax decisions while staying fully compliant. Whether you're handling a CRA reassessment or notice of objection, our expert team provides precision, legal support, full documentation preparation and audit defense. We protect your rights, reduce your tax burden and ensure the strongest possible case at every stage of the dispute process.