Tax Court of Canada Litigation.
When the CRA confirms a reassessment you believe is wrong, the Tax Court is where it gets decided.
How we approach this work.
The Tax Court of Canada is the federal court with jurisdiction to hear appeals of CRA assessments and reassessments under the Income Tax Act, the Excise Tax Act, and several related statutes. It is a specialized court with its own rules of procedure, and litigation before it differs in important ways from a typical civil action.
We represent taxpayers in the Tax Court at every stage: drafting Notices of Appeal, conducting examinations for discovery, attending settlement conferences, and arguing trials.
When you can appeal
An appeal to the Tax Court is generally available after the CRA Appeals Division has confirmed a reassessment, or after 90 days have passed since you filed a valid objection without a decision being issued. The deadline to file is 90 days from the date of the CRA's confirmation. Missing it requires a separate application for an extension that is far from guaranteed.
General Procedure vs Informal Procedure
The Tax Court has two procedures. The Informal Procedure is available where the federal tax and penalties in dispute are at or below defined thresholds, and it is faster, less formal, and does not allow examinations for discovery. Costs awards in the Informal Procedure are limited.
The General Procedure governs larger and more complex matters. It involves formal pleadings, examinations for discovery, documentary discovery, and full procedural rights. Costs awards can be substantial and follow the result more closely.
The choice between procedures has strategic implications well beyond the dollar value of the dispute. We will analyze your file and recommend the procedure that best serves your interests.
What Tax Court litigation actually involves
After the Notice of Appeal and the Crown's Reply are exchanged, the parties move into discovery. Each side examines a representative of the other under oath, with full transcripts. Documentary production is structured. Witness preparation is detailed.
Many General Procedure matters resolve at or near a settlement conference held before a judge of the Court. Where they do not, the matter proceeds to a trial that may last from a single day to several weeks depending on the issues and the volume of evidence.
Our approach
We litigate Tax Court matters with the same care we would bring to commercial litigation: tight pleadings, focused discovery, careful expert selection where required, and disciplined trial preparation. The objective is always to position the file for the best realistic outcome, whether that is a favourable settlement or a judgment.
Notice of Appeal: drafting the pleading that frames the case
The Notice of Appeal is the first and most important pleading in a Tax Court matter. It sets out the relevant facts, the issues, the statutory provisions relied on, the relief sought, and the grounds of appeal. The Crown's Reply will be drafted in response and will identify which facts are admitted, which are denied, and which assumptions of fact the Minister made in raising the assessment.
Those Ministerial assumptions matter. Under the well-established framework set out by the Federal Court of Appeal, the taxpayer carries the initial burden of demolishing the Minister's assumptions on a prima facie basis. The way the Notice of Appeal is drafted, and the assumptions the Crown is therefore required to plead, can shape the entire trial.
Examinations for discovery and documentary production
In General Procedure matters, each party examines a representative of the other under oath. For the taxpayer, that is usually a senior officer or the individual taxpayer personally. For the Crown, it is typically the CRA auditor who issued the reassessment. Transcripts of these examinations can be used at trial to impeach a witness who later changes their evidence, or to admit damaging facts the witness has already conceded.
Documentary production is structured. Each side files a list of documents and produces the documents in its power, possession, or control that are relevant to the matters in issue. Privileged documents are listed but not produced. The discovery phase is often where a case is genuinely won or lost, well before any judge is involved.
Settlement conferences and resolution before trial
Most General Procedure files reach a settlement conference held before a judge of the Tax Court who will not preside at the eventual trial. The conference is confidential. The judge gives candid views on the strengths and weaknesses of each side's position and works actively with the parties to narrow the issues or settle the matter outright.
The same legal constraint that applies at Appeals — that any settlement must have a foundation in fact and law — continues to apply in court. We prepare for settlement conferences with the same rigour as for trial: a focused brief, clear authorities, and a settlement position that the Department of Justice can responsibly accept.
Trial: preparation and presentation
If a matter does not settle, it proceeds to trial. Trials in the Tax Court vary widely in length, from one-day Informal Procedure hearings to multi-week General Procedure trials with expert evidence and large documentary records. The work required to be ready for trial — witness preparation, document books, opening and closing submissions, examination outlines, expert reports — is substantial and is not something that can be compressed in the final weeks.
We begin trial preparation early, often during discovery, and refine it as the evidence develops. By the time we are at the courthouse, our witnesses know what is going to be asked, the exhibits are organized, and the legal argument is fully developed.
Costs awards in the Tax Court
In the General Procedure, the successful party is generally entitled to costs from the losing party, calculated under a tariff or, in larger matters, on a more substantial basis. Offers to settle made before trial can dramatically affect the costs award if the offering party does at least as well at trial as the offer would have produced. In the Informal Procedure, costs are limited.
We discuss costs exposure with you at the outset and revisit it at each major stage so that the strategic decisions — whether to make a formal settlement offer, whether to accept one, whether to proceed to trial — are made with a clear view of the cost consequences.
Beyond the Tax Court: appeals and judicial review
Decisions of the Tax Court can be appealed to the Federal Court of Appeal, with a further appeal to the Supreme Court of Canada available only with leave. Separately, certain CRA decisions — for example, decisions on taxpayer relief applications, VDP rejections, or refusals to extend time — are not within the Tax Court's jurisdiction at all and must instead be challenged by way of judicial review in the Federal Court.
We act on appeals and judicial review applications where the underlying decision warrants it, and we will tell you frankly when it does not.
Is this the right service for your situation?
If the CRA has confirmed a reassessment, or if your objection has been pending without decision for 90 days or more, you have the right to appeal to the Tax Court of Canada. This service is for taxpayers, individual or corporate, considering or already engaged in that step.
Common questions.
What is the deadline to file a Notice of Appeal?
Generally, 90 days from the date on the CRA's confirmation of the reassessment. There is a separate route to apply for an extension, but it is discretionary and time limited.
Do I have to attend Tax Court hearings in person?
Most hearings are held in person at Tax Court facilities across Canada. The Court also conducts hearings by videoconference in appropriate matters. We will discuss the format and prepare you accordingly.
How long does a Tax Court matter take?
Informal Procedure matters can be resolved within nine to eighteen months. General Procedure matters typically run two to four years from filing to judgment, sometimes longer for complex cases.
Can the matter still be settled after I file?
Yes. A significant share of Tax Court matters settle, often at or before the settlement conference. Filing an appeal often improves the position for settlement because the issues are now framed in pleadings and the Department of Justice is engaged.
Who represents the CRA in Tax Court?
The Department of Justice represents the Crown in Tax Court matters. The CRA's audit and appeals officers are no longer the decision-makers at this stage.
Will I have to testify?
In most General Procedure matters where the facts are in dispute, the taxpayer testifies. We prepare you carefully for both examination-in-chief and cross-examination. In matters that turn purely on legal interpretation of agreed facts, live testimony may not be required.
Can I bring my accountant as a witness?
Yes, and in many cases that is appropriate. An accountant can give evidence about the books and records they prepared and the work they performed. Where the accountant's opinion on a tax issue is needed, that crosses into expert evidence and a separate expert may be retained instead, depending on the file.
What is the difference between an appeal and a judicial review?
An appeal challenges the assessment itself — whether the tax is owed — and goes to the Tax Court. A judicial review challenges the way a discretionary CRA decision was made, such as a refusal to grant taxpayer relief or to accept a VDP application, and goes to the Federal Court. The two routes have different deadlines, different remedies, and different standards of review.
What does Tax Court litigation cost?
Cost depends heavily on the procedure, the number of issues, the volume of documents, and whether the matter goes to trial or settles. We provide a detailed budget at the outset, broken down by stage — pleadings, discovery, settlement conference, trial preparation, trial — and update it as the file develops. You will not be surprised by the next invoice.
Can I switch lawyers if I have already filed?
Yes. Taxpayers can change counsel at any stage, including mid-litigation. We regularly take over files where another firm started the matter. The transition is usually straightforward once the prior file is transferred.
Your CRA file deserves serious counsel.
Whether you have just received an audit letter or you are weeks away from a Tax Court hearing, we can help. Initial consultations are confidential and we work with clients across Canada.