How Our Team Successfully Challenged a $380,000 CRA GST/HST Reassessment

Background

Our valued client, faced a significant challenge when they did not receive a GST/HST audit notice from the Canada Revenue Agency (CRA). Consequently, the CRA reassessed their return at the highest HST rate and disallowed all Input Tax Credits (ITCs), resulting in an unexpected tax liability of $CAD 380,000. The client, anticipating a GST/HST refund, contacted our firm for assistance in addressing this substantial tax bill.

Analysis and Solution

Upon reviewing the CRA’s reassessment, our team promptly contacted the responsible CRA officer, only to discover the file had already been closed. To reopen the case, we determined that filing a Notice of Objection was the most effective course of action. We prepared and submitted the Notice of Objection to the CRA, accompanied by all necessary supporting documentation. Due to the significant GST/HST amount assessed, the CRA’s collections division began contacting the client, causing considerable distress. Our team, with the assistance of a tax lawyer, acted as a liaison to negotiate additional time for the client while the objection was processed. Despite the client’s stress from ongoing CRA demand letters, we maintained consistent communication with both the CRA Appeals Division and Collections Division, emphasizing the undue hardship caused to the client. This persistent advocacy led to the Appeals Division prioritizing the objection’s processing, while Collections agreed to temporarily halt actions, providing several months for resolution.

Team Involved

Al Sigera worked closely with the client and their legal counsel to provide comprehensive support throughout the process.

Accountor CPA Results

• Successfully engaged the CRA to reopen the file and submit required documentation.
• Effectively managed CRA Collections to suspend actions pending the appeal’s resolution.
• Filed the Notice of Objection within the required timeline.
• Ensured timely processing of the objection through diligent follow-ups with the CRA Appeals Division.

Conclusion

This case underscores the importance of proactive communication and strategic intervention when navigating complex GST/HST disputes with the CRA. By swiftly filing a Notice of Objection, providing robust documentation, and advocating on behalf of a client, our team alleviated significant financial and emotional stress for the client. The collaboration between our firm, the client, and their legal counsel ensured a fair review process and a temporary reprieve from collections actions. This outcome highlights the value of expert guidance in resolving tax disputes efficiently, protecting businesses from undue financial burdens and fostering confidence in compliance processes.