Somtimes, you just get lucky with deadlines

National Post

2010-08-28


Consider the recent tax case of Kurt Burke, who missed a critical deadline, yet managed to still get an extension by a sympathetic judge.

The Income Tax Act contains numerous deadlines. You're probably familiar with the April 30 deadline for filing a personal tax return, but did you know the deadline is extended to June 15 if you or your spouse or partner had self-employment income?

Even the Canada Revenue Agency has deadlines of its own. For example, the CRA has only three years from the date printed on your Notice of Assessment to reassess your tax return.

If you disagree with the CRA's assessment, you can file a formal Notice of Objection, but you must file that objection within one year from your normal filing due date or 90 days after the date printed on your Notice of Assessment, whichever is later.

Once CRA has reviewed your Notice of Objection, it will either issue a reassessment or a confirmation that the assessment was correct. You then have 90 days from the date of the CRA's review of the objection to appeal to the Tax Court.

You can also appeal to the court if the CRA delays beyond 90 days without issuing a response to your Notice of Objection.

In August 2009, Mr. Burke received a court order extending his deadline to Sept. 4, 2009, to file a valid Notice of Appeal from reassessments for his 2001, 2002 and 2003 tax years.

For some reason, no valid Notice of Appeal was filed by that extended deadline. Rather, it was filed on Feb. 16, 2010, more than five months after the deadline extension.

Five days later, Mr. Burke's agent wrote to the Tax Court requesting an extension of time "to apply for the court hearing," which presumably was meant to formally seek the court's permission to extend the September 2009 deadline to Feb. 16.

The CRA brought a motion in Tax Court to dismiss the case outright, arguing that since Mr. Burke didn't file timely Notices of Appeal for the tax years in question, he was precluded from taking the matter to tax court.

Mr. Burke's agent was unable to provide a satisfactory explanation for the failure to file by the September deadline, leading the judge to comment that "it appears that [Mr. Burke's] agent does not understand the court process."

Nonetheless, the judge felt it would be "inappropriate in the circumstances to deny [Mr. Burke's] substantive rights due to the actions of [his] agent in the circumstances where it is not alleged that the delays are prejudicial to the [CRA's] ability to defend an appeal." The judge therefore allowed the Notices of Appeal filed in February 2010.

While it may have been Mr. Burke's lucky day, my best advice is to always pay attention to your deadlines, lest you find yourself before a less sympathetic judge.