As a company or private individual, paying taxes is a duty you cannot escape and you must be consistent about it. Indeed, Revenu Québec has the power to oblige taxpayers to amend their tax situation by using arbitrary notices of assessment, in response to a delay in tax filings, an error in the amount paid or debts remaining.
What is an arbitrary notice of assessment?
Once your tax return is filed with Revenu Québec (and Revenue Canada), they will send you a notice of assessment. This document contains all the tax information you have declared and the instructions that follow: what you have to pay for taxes, potentially the amount of a debt you owe Revenu Québec, and the steps you need to take in order to amend your tax situation.
However, if you do not respond to this important letter in a timely manner, you may receive an arbitrary notice of assessment. This document indicates the amount to be paid to the institution to compensate for your past mistakes, such as filing your taxes past the deadline. The term arbitrary comes from the fact that the amount fined is not defined according to your income, but generally according to the reason(s) for which you received a notice of assessment.
What to do when you receive an arbitrary notice of assessment?
If you open your mailbox to find an unpleasant surprise from Revenu Québec: here are the steps to be taken to amend your situation!
Verify your tax situation
If you think an error has been made and that you should not be receiving such a letter, make sure that your tax situation is perfect in the eyes of Revenu Québec or Revenue Canada. Check your previous tax returns: Is the amount of reported income correct? Did you file everything on time, by mail or electronically? Also, make an inventory of previously obtained notices of assessment: have you done everything outlined in these assessments? Have you ever filed any amendments late?
If you find errors in the management of your finances, get into contact with a Revenu Québec representative, who will be able to advise you on the follow-up of events. You will, however, most certainly have to pay the amount indicated on the notice of assessment, or at least part of it.
Appeal the notice
In its efforts to combat tax evasion, Revenu Québec is increasingly using this recourse and sometimes errors are made. This is why it is possible to fill out a notice of objection, by providing tangible proof of their error. It should be noted, however, that these appeals are rarely successful for complainants.
You can always come to a compromise with the institution, especially if the sums or penalties (such as the 50% fee for gross negligence, which is very common) are too high compared to your situation. If you want to go to court, be aware that court procedures are often very cumbersome and rarely beneficial for taxpayers.
As you can see, the best way to avoid receiving an arbitrary notice of assessment is to complete your tax returns correctly and without delay. If you cannot do it yourself, you can always call on professional tax experts: our tax experts will be delighted to give you a hand, so contact us today!
Frédéric Roy-Gobeil
CPA, M. TAX
As President of T2inc.ca and an entrepreneur at heart, I have founded many start-ups such as delve Labs and T2inc.ca. A former tax specialist at Ernst & Young, I am also a member of the Ordre des comptables professionnels agréés CPA and have a master's degree in taxation from the Université de Sherbrooke. With a passion for the world of entrepreneurship and the growth mindset, I have authored numerous articles and videos on the industry and the business world, as well as on accounting, taxation, financial statements and financial independence.
