When CRA sends an assessment to the wrong address

Tax season is now in full swing and, over the next few months, your clients will receive a Notice of Assessment (NOA) from CRA.

This year’s NOA will look different because CRA redesigned it to make it simpler and easier to read. The new look is part of the government’s commitment to make CRA more “client-focused and more helpful to Canadians.”

The re-designed NOA displays the most important information on the first page, including the results of the client’s assessment, her account summary, and what she’s supposed to do with the information.

The NOA is important because it confirms the amount of tax payable for the year being assessed, and tells a client how much time she has to object to the assessment. Under tax law, the deadline for objecting to an NOA is one year from the normal filing due date (typically April 30, or June 15 for those who have self-employment income), or 90 days after the date printed on the NOA, whichever is later.

But, a taxpayer who misses that deadline due to circumstances beyond her control can apply for an extension to CRA within one year of the deadline. If CRA denies a taxpayer’s extension deadline request, she can appeal that decision to the Tax Court.That’s exactly what happened in the recent case of Peter Pilgrim (Pilgrim v The Queen, 2015 TCC 302), who went to Tax Court requesting an extension of time to file NOAs for the 2009, 2010 and 2011 taxation years.

In September 2012, CRA issued Notices of Reassessment to Pilgrim for the 2009 and 2010 taxation years and an NOA for the 2011 taxation year, all of which were mailed by CRA on Sept. 28, 2012.

Pilgrim testified he never received these (re)assessments and he first learned of them in late May or early June of 2014. That’s when he received his NOA for the 2012 taxation year, which had been mailed to him on May 15, 2014. The 2012 NOA showed a substantial tax balance owing from prior years. Pilgrim then contacted an accountant, who brought the court application to extend the deadline to object.

Prior jurisprudence has found that where a taxpayer alleges that he never received his NOA, CRA bears the burden of proving that the NOA was mailed or otherwise communicated to the taxpayer. It’s also important that CRA demonstrate that it sent the NOA to the taxpayer’s correct address—which turned out to be the problem in this case.

A printout of CRA’s electronic records showed the history of Pilgrim’s mailing addresses from July 2010 to October 2015. His mailing address was missing his unit number, which was only added in May 2014. The printout also indicated that on September 15, 2011, December 5, 2011 and May 8, 2014, items mailed to Pilgrim were returned to CRA, “suggesting that the CRA was aware, or could have been aware, that [the address…] without showing […] the unit number was not the correct address for Mr. Pilgrim.”

Indeed, Pilgrim lived in a residential complex containing 79 suites. He therefore submitted that “an occupant’s unit number is an essential component of the address of that occupant.”

The judge agreed, relying on a prior decision of the Federal Court of Appeal which held that if an NOA was sent to a wrong address, it’s as if the “reassessment was not issued at all.”

As a result, the judge ruled that the limitation period governing the period of time Pilgrim had to object to the NOAs never began, since CRA failed to send the NOAs to his correct mailing address. This meant there was no need for Pilgrim to apply to extend the time for filing his objections for the 2009, 2010 and 2011 taxation years.

Jamie Golombek

Tax & Estate

Managing Director, Tax and Estate Planning, CIBC Private Wealth Team Jamie Golombek is Managing Director, Tax and Estate Planning with CIBC in Toronto. As a member of the CIBC Private Wealth team, Jamie works closely with advisors from across CIBC to support their clients and deliver integrated financial planning and strong advisory solutions. He joined the firm in 2008 after 12 years with a global investment company, where he was involved in both internal and external consulting on all areas of taxation and estate planning. Jamie has also worked for Deloitte as a tax specialist in the Toronto office, where he specialized in both personal and corporate tax planning. Jamie is quoted frequently in the national media as an expert on taxation. He writes a weekly column called “Tax Expert,” in the National Post, has appeared as a guest on BNN, CTV News, and The National, and for several years was a regular personal finance guest on The Marilyn Denis Show. He received his B.Com. from McGill University, earned his CPA designation in Ontario and qualified as a US CPA in Illinois. He has also obtained his Certified Financial Planning (CFP) and Chartered Life Underwriting (CLU) designations. In 2023, Jamie was named a CPA Ontario Fellow. The FCPA is the highest distinction that can be bestowed upon a CPA who brings distinction to themselves and to their profession through leadership and achievement in their professional, community or personal lives. Jamie is a past chair of the Investment Funds Institute of Canada’s Tax Working Group. He is also a member of CPA Ontario, the Illinois CPA Society, the Estate Planning Council of Toronto, the Canadian Tax Foundation and the Society of Trust and Estate Practitioners. For nearly two decades, Jamie taught an MBA course in Personal Finance at the Schulich School of Business at York University in Toronto.