In a recent case from the Tax Court of Canada in Reynolds v The Queen 2013 TCC 288, the Court provided a simple reminder that determining the deadlines to file a notice of objection or an application for an extension of time to file a notice of objection can sometimes be less than straightforward.
In this case, the Taxpayer filed an application for the Canada Child Tax Benefit (“CCTB”) for two children D and E. On November 20, 2009, it was determined that she was eligible to receive CCTB for both D and E for the 2008 base year. On August 19, 2011, a redetermination was made with respect to the 2009 base year for D and E.
On October 6, 2011, the Taxpayer filed an application for the CCTB for two additional children – A and T – for the 2008 and 2009 base years. On November 23, 2011, the Canada Revenue Agency responded to her October 6, 2011 application, but did not make a determination with respect to A and T.
On January 29, 2013, the Taxpayer filed a notice of objection with respect to A and T for the 2008 and 2009 base years. CRA rejected the Taxpayer’s objection on the basis that it was filed beyond the deadline to file a notice of objection and an application for an extension of time to file a notice of objection for the 2008 and 2009 base years. The Taxpayer then filed an application with the Tax Court for an extension of time to file a notice of objection with respect to A and T for the 2008 and 2009 base years.
Applications for an Extension of Time to File a Notice of Objection
Section 166.1 of the Income Tax Act (the “Act”) provides that a taxpayer may apply for an extension of time to file a notice of objection within one year after the period to file a notice of objection has passed (which is generally 90 days from the date the assessment was sent).
Section 166.2 of the Act allows a taxpayer who has made an application under section 166.1 to apply to the Tax Court of Canada to have their application granted where either CRA has rejected their application or has not notified the taxpayer of their decision within 90 days of their application. In order to make this application to the Tax Court, the taxpayer must file their application within 90 days of the date their application under section 166.1 of the Act was rejected.
The Court reviewed the provisions of the CCTB and found that a determination of an individual’s eligibility for the CCTB in any particular year is specific to each particular child. As such, although CRA had made a determination with respect to D and E for the 2008 and 2009 base years, it had not yet done so for A and T for those two years. As such, the Tax Court dismissed the application on the basis that the Taxpayer’s application was premature because no determination had yet been made with respect to A and T for the 2008 and 2009 base years.
This case provides us with two useful reminders.
Firstly, the administration of the CCTB can be very difficult of taxpayers as taxpayers can be inundated with multiple letters regarding multiple base years and it can be difficult to identify the determinations – which can be objected and appealed to – from other correspondence.
Secondly, this is a reminder that there are certain circumstances where the dismissal of an application or an appeal is to the taxpayer’s advantage. In this case, we hope the dismissal will prompt CRA to finally process the Taxpayer’s CCTB application for A and T after almost two years of waiting.