Chapter 4 - Appeal process after audit conclusion

Issued: 2014/02; Revised: 2019/06/15

Appeals process

When the ministry issues an assessment for a tax liability, or disallows or reduces a refund claim, the taxpayer has the right to appeal the ministry’s decision to the Minister of Finance.

To initiate an appeal, the taxpayer must provide a written notice of appeal within 90 days of the date of the Notice of Assessment or the notification of a disallowed or adjusted refund. The notice of appeal must:

• Be in writing
• Be addressed to the minister
• Clearly set out the reasons for the appeal and facts relating to it

When a notice of appeal is received by the minister, it is referred to the Appeals and Litigation Branch (“the Appeals Branch”). The Appeals Branch is responsible for reviewing the taxpayer's appeal.

The Appeals Branch deals with all arguments and facts provided by the taxpayer, reviews the ministry’s position, and recommends that the assessment or disallowance be confirmed, adjusted or waived.

During the review of an appeal, members of the Appeals Branch, with approval from the auditor's manager, may contact the auditor who completed the audit or refund verification for clarification on aspects of the audit or refund verification under appeal.

The Appeals Branch must confirm the sections of the legislation and regulations which the audit or refund decision is based on, and consider whether the facts and existing evidence support the decision. It is essential that the auditor clearly document in the audit report the basis for the assessment or disallowance, with reference to the relevant sections of the legislation and regulations. The Appeals Branch may request from the taxpayer additional information that supports the claims.

Upon completion of the review, if the decision is to vary or allow the amount assessed or refunded, the Appeals Branch discusses its recommendation with the audit manager. The Appeals Branch usually does not initiate a discussion if the decision is to affirm the decision.

The Appeals Branch's recommendation is then forwarded to the minister, along with the original notice of appeal and any supporting documentation from the taxpayer. It is the responsibility of the minister to review the recommendation made by the Appeals Branch and determine whether to affirm or amend the original decision. The minister then informs the appellant of the decision in a letter.

Barring a full allowance of its claim, the appellant may further appeal the decision rendered by the Appeal’s Branch to the courts. The appellant must file the court appeal within 90 days of the date of the minister’s decision letter.

Adjustment compliance activities

The Appeals Branch is responsible for creating the adjustment audit or refund case if the appeal decision amends the original decision.

Record retention

As mentioned in this manual, Section 2I, Finalizing the audit assessments, the auditor is to attach to the audit or refund case documents that support the assessment. This includes all field work records, working papers, supporting records, and correspondence. If the taxpayer appeals the audit assessment or disallowance of refund, the review of the appeal can be completed with minimal need for contacting the original auditor.