CRA Must Allow Appeals if No Tax Is Owing

A significant tax ruling has set some new legislative matters in motion to ensure benefit potential Registered Disability Savings Account beneficiaries are not penalized by a recent ruling by the Tax Court of Canada.

In, "Tozzi v. The Queenî, Giovanni Tozzi applied for the Disability Tax Credit (DTC) and was denied. He was unable to appeal because he did not have enough income for the tax credit to be of financial benefit to him. He explained to the court that in order to be a beneficiary of a Registered Disability Savings Account he has to be eligible for the DTC and CRA must allow appeals for reasons other than tax reduction. The judge dismissed Mr. Tozzi's appeal as it is beyond the jurisdiction of Tax Court but in doing so noted that Parliament should address this issue.

And this is exactly what has happened. On November 25, 2010, Minister of Finance Jim Flaherty announced that the government will introduce legislation that will allow an individual to appeal a decision by CRA even when there is no tax owing (a "nilî assessment). Currently an appeal is not allowed when tax payable is not affected

For Mr. Flaherty's announcement: http://www.fin.gc.ca/n10/10-113-eng.asp

For the Tax Court ruling:

http://decision.tcc-cci.gc.ca/en/2010/2010tcc545/2010tcc545.html

ADDITIONAL EDUCATIONAL RESOURCES: Essential Tax Facts 2011, Introduction to Personal Tax Preparation Course