Notice of reassessment

After examining a return, the Minister sends a notice of assessment under section 152(2) of the Income Tax Act. Section 152(4) lets the Minister at any time make an assessment, reassessment or additional assessment, except that one made after the taxpayer’s normal reassessment period is allowed only in the cases that subsection lists, subject to the other exceptions in section 152. A buyer meets the notice when checking whether the tax results a seller filed were later changed.

Why it matters to a buyer

Section 152(8) says an assessment is deemed valid and binding despite any error, defect or omission, subject to being varied or vacated on an objection or appeal and subject to a reassessment. Ask for each year’s notice of assessment and any notice of reassessment, then compare them with the filed return. The normal reassessment period marks when the CRA may reassess only in the cases section 152(4) lists, and the answer on financials that do not match the tax returns covers a related check.

Objecting

Under section 165(1) a taxpayer who objects to an assessment may serve a written notice of objection setting out the reasons and all relevant facts. The time limit depends on the taxpayer, and sections 165(1.1) to 165(1.2) limit or bar some objections. Read the section or ask an adviser before relying on a date.