Personal Finance

Fixing Incorrect CRA Reassessment?

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  • May 21st, 2018 9:04 am
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[OP]
Deal Addict
Mar 10, 2010
1426 posts
391 upvotes

Fixing Incorrect CRA Reassessment?

Has anybody had to fix an incorrect Notice of Reassessment?

I just got one from 2016 where they doubled my income by re-applying the income that was already reported as business income (T2125).

I've submitted a formal objection already, but the wait time appears to be ~285 days for a resolution.

Has anybody found a quicker way to fix such an obvious error on the CRA's part?
39 replies
Deal Addict
Oct 6, 2015
2463 posts
1372 upvotes
Do they claim you owe them money? If its an obvious error, then all of the interest charges will be reversed when they fix it.
Member
Oct 4, 2006
271 posts
88 upvotes
I had some attribution of income from a T5 against me on a joint with someone who had already reported 100% of the income. I submitted a formal objection and that took about... 5 months to deal with.

I also wrote a letter in subsequent to the objection and I was told that would have been sufficient. However, after you file a formal objection your file gets "locked" until the reviewer looks at it. That was what I was told from the gentleman who dealt with my objection.
[OP]
Deal Addict
Mar 10, 2010
1426 posts
391 upvotes
Crap, so by filing the formal objection already I may have to actually wait the ~285 days? Brutal! And yes burnt69, completely obvious screw-up so I'll win the objection so I'm not worried about the interest, just the amount of time this is going to take to clear up.
Yannerd wrote: I had some attribution of income from a T5 against me on a joint with someone who had already reported 100% of the income. I submitted a formal objection and that took about... 5 months to deal with.

I also wrote a letter in subsequent to the objection and I was told that would have been sufficient. However, after you file a formal objection your file gets "locked" until the reviewer looks at it. That was what I was told from the gentleman who dealt with my objection.
Deal Addict
User avatar
Dec 24, 2007
1502 posts
1755 upvotes
BC
Usually faster dealing with the area that processed the adjustment then filing an objection. I recently had some 2016 medical expenses that were disallowed and it took 60 days after I submitted the receipts for a reassessment. The Appeals Division is really backlogged and it will be months before someone is assigned to your file. You have the later of one year from the tax return filing due date or 90 days from date of reassessment to file an objection, so it is generally faster dealing with the processing area first and see whether you get resolution before going the objection route. However, since you already filed a Notice of objection your file is "locked" so that other areas cannot reassess the return.
Deal Addict
Mar 26, 2006
2101 posts
228 upvotes
OTTAWA, Canada
I had a reassessment like this rolled back, took about two months after providing documents electronically through my cra
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[OP]
Deal Addict
Mar 10, 2010
1426 posts
391 upvotes
Did you file an objection or go through other channels?
demanche wrote: I had a reassessment like this rolled back, took about two months after providing documents electronically through my cra
Deal Addict
Jul 3, 2017
3860 posts
2787 upvotes
burnt69 wrote: If its an obvious error, then all of the interest charges will be reversed when they fix it.
Dream on!

The rule is that if the CRA says that you owe money, pay it immediately to avoid interest and penalties. Then file an objection and wait. And follow up. And wait. And follow up again. And wait.

Eventually the original error will be resolved. Then you have the choice of either pursuing the same long painful path to recover interest and reverse penalties, or you can just get on with your life.
Deal Addict
Oct 6, 2015
2463 posts
1372 upvotes
Exp315 wrote: Dream on!
Nope.
The rule is that if the CRA says that you owe money, pay it immediately to avoid interest and penalties. Then file an objection and wait. And follow up. And wait. And follow up again. And wait.
That's not a 'rule' by any stretch of the imagination. If the case is so obvious that you're right, sure, interest and penalties will accrue, but once the adjustment is made in your favour, they will disappear. Such advice is good if it is questionable if one will win their case or not, but if its simply a case of mistaken data entry, then there is no need to send them money.
Eventually the original error will be resolved. Then you have the choice of either pursuing the same long painful path to recover interest and reverse penalties, or you can just get on with your life.
Its not a long painful path. Its automatic.
Deal Addict
Mar 26, 2006
2101 posts
228 upvotes
OTTAWA, Canada
Clacker wrote: Did you file an objection or go through other channels?
[/]

When I uploaded the docs they wanted it created a new case with the same department that had initially re-assessed me.
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Deal Addict
Jul 3, 2017
3860 posts
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burnt69 wrote: Its not a long painful path. Its automatic.
Wrong. And I speak from experience.
Deal Addict
Oct 6, 2015
2463 posts
1372 upvotes
Exp315 wrote: Wrong. And I speak from experience.
Nope, not wrong, and I speak from experience. Never had a problem having interest and penalties reversed when the CRA has amended something in my favour. If you know you're going to win, sending them money is a complete and utter waste of money that potentially could be earning better returns elsewhere.
Deal Addict
Jul 3, 2017
3860 posts
2787 upvotes
burnt69 wrote: Nope, not wrong, and I speak from experience. Never had a problem having interest and penalties reversed when the CRA has amended something in my favour. If you know you're going to win, sending them money is a complete and utter waste of money that potentially could be earning better returns elsewhere.
Just because you've never had a problem doesn't mean that people don't have problems. And I didn't say that you couldn't get interest and penalties reversed, just that it is not automatic, and it can be such a long painful process that it's not worthwhile - you're better off to let it go. You only get so much lifetime to spend - do you really want to waste it going back and forth with the CRA?
Deal Addict
Oct 6, 2015
2463 posts
1372 upvotes
Exp315 wrote: Just because you've never had a problem doesn't mean that people don't have problems. And I didn't say that you couldn't get interest and penalties reversed, just that it is not automatic, and it can be such a long painful process that it's not worthwhile - you're better off to let it go. You only get so much lifetime to spend - do you really want to waste it going back and forth with the CRA?
As I wrote earlier, there is no 'back and forth'. Its automatic if they do an adjustment, and the interest and penalties disappear. Been through it a few times. Its no big deal, not long, not painful, completely automatic and coded into their software.

And why send the government money just because they made a mistake? That makes no sense to me.
[OP]
Deal Addict
Mar 10, 2010
1426 posts
391 upvotes
I've gone through this before on a different matter and even had to take the CRA to Tax Court to get them to obey the law as written, they caved the month before we were supposed to have our court date. In that case I hadn't paid anything and it was reversed immediately with no other hoops to go through, they simply issued another notice of reassessment, and since nothing was owing there was no interest due, in fact they had to pay me interest (something stupidly low) on the amount they owed me that had taken ~2.5 years to get resolved.

I'd rather not waste another ~2 years, but I think the decision will be much faster this time as the case is a very simple matter of them adding an amount to my return twice.

I just wish there was a faster way of resolving it. The CRA has put in a request for the supervisor of the division that made the assessment to contact me, so I'm hoping we can resolve it without having to go through the objection process.

It still boggles my mind that somebody as incompetent as the agent who dealt with my file is allowed to push out a reassessment, I'll be making a service complaint after this is all resolved as something this stupid needs to go on their record.
Deal Addict
User avatar
Jul 25, 2008
1542 posts
388 upvotes
Ottawa
We had an problem when submit your tax return by electronics.

The problem:
CRA does not have the T slip that we have..someone in financial institution failed.

The story
CRA send reassment letter with big owing.

We found out CRA did not have one T slip when we spoke to an agent

We filed objection with our T slip.
Waiting.waiting..
CRA continue sending out threatening interest added letter.. no wonder pphone scammers love to be CRA .

After 3 months, CRA responded that the the objection is declined because the objection dept only dealt with the dollars owe to them. But they did forward the file to proper dept as they 8ndicated on phone.

We are still waiting after 6 months. Worst part is CRA never ask for copy of the T slip 8n their first review.

This would not have happened if we file tax return Paper with copies of slips in it.
Do not file tax return by electronic. It may take longer to clear but you won't get stucked threatening 8nterest owing letters.
[OP]
Deal Addict
Mar 10, 2010
1426 posts
391 upvotes
This is actually somewhat the problem I'm having the "Matching Department" does not have access to all T-slips. So even though the income is reported on my T2125 they are not able to access that slip to see it's been reported, and they just added it on themselves even after I told them to check the other slip and sent them physical copies of the slip. I don't know how they can have people reviewing files who aren't able to actually see which T-slips have been submitted by the tax payer, sounds like a silly set up to me.
cf7777 wrote: We had an problem when submit your tax return by electronics.

The problem:
CRA does not have the T slip that we have..someone in financial institution failed.

The story
CRA send reassment letter with big owing.

We found out CRA did not have one T slip when we spoke to an agent

We filed objection with our T slip.
Waiting.waiting..
CRA continue sending out threatening interest added letter.. no wonder pphone scammers love to be CRA .

After 3 months, CRA responded that the the objection is declined because the objection dept only dealt with the dollars owe to them. But they did forward the file to proper dept as they 8ndicated on phone.

We are still waiting after 6 months. Worst part is CRA never ask for copy of the T slip 8n their first review.

This would not have happened if we file tax return Paper with copies of slips in it.
Do not file tax return by electronic. It may take longer to clear but you won't get stucked threatening 8nterest owing letters.
Deal Addict
User avatar
Jul 25, 2008
1542 posts
388 upvotes
Ottawa
Only one can help Canadians from CRA are having Media reporting the problem.

I will not file by electronic again to ensure CRA have copies of T slip what I have.

No grieve...
Jr. Member
Aug 29, 2011
193 posts
148 upvotes
GTA
Clacker wrote: This is actually somewhat the problem I'm having the "Matching Department" does not have access to all T-slips. So even though the income is reported on my T2125 they are not able to access that slip to see it's been reported, and they just added it on themselves even after I told them to check the other slip and sent them physical copies of the slip. I don't know how they can have people reviewing files who aren't able to actually see which T-slips have been submitted by the tax payer, sounds like a silly set up to me.
I think to avoid this situation going forward you need to use the T slip entry in the tax software. Putting it on the T2125 business form seems correct but fools CRA matching software.
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