Extended Reassessment Period - Where a 3rd party request for information from CRA is contested, new rules would "stop the clock" on the normal reassessment period for all taxpayers affected.


The 2018 Federal Budget proposed a new rule which would “stop the clock” on the usual reassessment deadline where a third-party requirement for information, or a compliance order against the specific taxpayer(s), is contested (proposed Section 231.8). The period from filing court papers to the final decision of the courts (including any appeals) will not count towards the usual time limit for CRA to reassess any taxpayer affected by the information disclosed.

The extended reassessment period would operate in respect of all issues, not just those to which the requirement or compliance order relates.

Taxpayers should be aware of any disputed third-party requests for information or compliance orders that may impact their reassessment period. It is possible that the taxpayer would not even be aware of the third-party requirement and be surprised by a reassessment outside the usual reassessment period.

This proposal was included in the second Budget Bill, Bill C-86, which received Royal Assent on December 13, 2018.

For further information see Video Tax News Monthly Tax Update Newsletter, Issue No. 444.