Proposal letter was not decision but rather was interim step in CRA’s reassessment

Administrative Law - Judicial review - Nature of decision or decision maker under review

After taxpayer filed late returns for 2005 through 2007 taxation years, CRA conducted audit and issued proposal letter setting out proposed adjustments and advising that, if taxpayer did not provide information to refute such adjustments, returns would be reassessed as set out in letter. Minister reassessed taxpayer under Income Tax Act in accordance with proposal letter. Taxpayer’s request for relief from interest and various penalties in respect of taxation years was refused. Taxpayer’s request for reconsideration of refusal of relief request was denied. Taxpayer applied for judicial review. Application dismissed. Taxpayer identified proposal letter as decision for which he was seeking judicial review, but Federal Court’s authority to review decisions of federal decision-makers was limited by s. 18.5 of Federal Courts Act. Proposal letter was clearly not decision, but rather was interim step in CRA’s reassessment of taxpayer’s income that did not determine any substantive rights or obligations. Letter was not reviewable decision and, in any event, taxpayer’s application was filed years after expiry of 30-day time limit for applying for judicial review. Given reference to final refusal decision in notice of application, significant time and resources devoted by taxpayer to this application and fact that Minister provided submissions on refusal decision’s reasonableness, taxpayer was also invited to make such submissions. As both parties had opportunity to present arguments on reasonableness of refusal decision, it would be treated as subjected matter of application.

Chekosky v. Canada (Revenue Agency) (2019), 2019 CarswellNat 2953, 2019 FC 841, Elizabeth Walker J. (F.C.).

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