The Tax Court of Canada’s Informal Procedure rules drastically reduce the length and complication of the Tax Court hearing process, making them an attractive option for many taxpayers who have received a Notice of Confirmation or Notice of Reassessment that they disagree with.
One of the obstacles to using an informal procedure appeal, though, is that your recovery is limited to $25,000* and unless you specifically agree to limit your recovery, you can’t use the informal procedure to appeal “amounts in issue” greater than that.
The Tax Court of Canada Act provides that
[The informal procedure applies] in respect of appeals under the Income Tax Act where a taxpayer has so elected… and
(a) the aggregate of all amounts in issue is equal to or less than $25,000…
But this does not mean that you are limited to $25,000 of recovery if you have multiple assessments under appeal. In a 1994 decision, Justice Garon (who later became Chief Justice of the Tax Court) stated that
It is to be pointed out that this definition speaks of “the aggregate of all amounts” in relation to an assessment. The concept of “the aggregate of all amounts” is not linked in any way to a notice of appeal.
In my view, the words “the aggregate of all amounts” in issue in the context of the provisions of the Tax Court of Canada Act refer to the total of all amounts in issue in a single assessment made under the Income Tax Act and not to the total of the aggregate of all amounts in issue in a notice of appeal where a taxpayer for instance, by a single notice of appeal, appeals several assessments made by the Minister of National Revenue. [Maier v. R., 1994 T.C.J. No. 1260]
So the $25,000 recovery limit under the Informal Procedure is a per-assessment limit and not a per-appeal limit. The reasoning is the obvious one, that if the Taxpayer has three assessments for $20,000 each, the Taxpayer can simply appeal them separately under the Informal Procedure.
The limit for informal procedure for GST/HST appeals (under section 18.3001 of the Tax Court of Canada Act) is $50,000. The TCC hasn’t specifically considered Maier in the GST/HST context (it’s a different rule and the wording is slightly different) but the same reasoning would apply.
* Loss determinations are limited to $50,000
