Introduction
As seen in Part I, there is a growing backlog of Notices of Objections (tax objections) and Notice of Appeals (tax appeals) that need to be dealt with. Part I discussed whether taxpayers should resolve their dispute through the CRA Appeals process and how to do so efficiently. Part II explores the avenues available for an early resolution of an appeal before the Tax Court of Canada.
Tax Court of Canada
Bypassing CRA Appeals and filing an appeal to the Tax Court is a viable option to efficiently deal with a tax dispute.[1] As compared to the CRA Appeals process, litigation is structured, and the timetable provides some assurances that matters will proceed in a timely manner. For less complicated matters, litigation steps should take about six to eight months to complete, and then the matter can be set down for trial.[2]
However, COVID-19 has and continues to impact the Tax Court’s functionality. It has not been able to hold regular in-person hearings for over ten months, and its ability to hold virtual hearings remains challenged. The number of appeals that were supposed to be heard as of March 2020 continues to climb. Proactively, the Court has been rescheduling these.
Efficiencies with Appeals before the Tax Court
As a result of the backlog, the time between the completion of trial readiness steps and the hearing date has increased. Thus, skipping ahead to Tax Court, but waiting for a full-fledged trial may not be more efficient. There are several avenues taxpayers can use to make it more efficient, such as: settlements, bifurcation, and the preliminary ruling docket.
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