What you need to know about the costs of appealing a tax decision
Disagreeing with how the Canada Revenue Agency has assessed your return is a right of every Canadian. Everyone is allowed their day in court. Depending on the complexity of your case and whether you take the general or informal procedure will affect how expensive going to court can be. The general route will require a lawyer and formal court procedures are followed.The informal route can be beneficial when the amount involved isn’t cost-effective to hire a lawyer, but be aware that hidden costs like your time and the amount you’re awarded may be significantly less than you were expecting.
- There are two options when appealing to the Tax Court of Canada: the “general procedure” or the “informal procedure.”
- The informal procedure is limited to cases where the amount of federal tax and penalties in dispute for each taxation year, excluding interest, is $25,000 or less or $50,000 for a loss.
- Costs can quickly add up regardless of which route, and in the end, even if you’re successful the awarded costs are often significantly less than what you’ve spent on a lawyer or the perceived value of your time.
“The costs, both out-of-pocket and your time, quickly add up.”