Case Commentary: Schwarz v. HMK – You must appeal within the deadline for tax reassessments

Notice of Appeal filed after deadline

David J Rotfleisch, CPA, JD is the founding tax lawyer of Taxpage.com and Rotfleisch & Samulovitch P.C., a Toronto-based boutique tax law corporate law firm.

In June 2025, the Tax Court of Canada (TCC) handed down the decision in Schwarz v. HMK, 2025 TCC 86, dismissing the taxpayer's request for an extension of time to file an appeal in respect of his 2008 to 2014 taxation years. A taxpayer may appeal a Canada Revenue Agency decision to the Tax Court within 90 days from the date of the notice of confirmation, notice of reassessment or notice of redetermination.

If the taxpayer is unable to appeal within this 90-day window, the taxpayer may file an application to the Tax Court requesting an extension of time to appeal. The Tax Court generally does not grant time extensions.

In this case, the taxpayer was disallowed his charitable donations made through his participation in the Global Learning Gifting Initiative, a donation arrangement that has been well-litigated at the Tax Court and the Federal Court of Appeal.

The CRA confirmed the reassessments by Notice of Confirmation dated April 8, 2021. The taxpayer claimed he never received the Notice of Confirmation and only became aware of it when he was contacted by the CRA Collections Department in June 2021 for an amount owing of around $170,000.

In response, the taxpayer requested that the Notice of Confirmation be resent to him and sent the CRA a cheque of around $87,000 in "full fulfillment" of his outstanding debt. It was unclear why the taxpayer believed the $87,000 could fully fulfill his outstanding debt of $170,000; it could be that the $87,000 was the original tax amount owing, and the $83,000 difference was interest and penalties.

Nevertheless, the CRA cashed out the cheque in September 2021 and resent the Notice of Confirmation via regular mail on November 9, 2021. The taxpayer received the Notice of Confirmation via regular mail sometime in November 2021.

The taxpayer later complained numerous times that the CRA, presumably by accepting the cheque of a lesser amount, was estopped from claiming the full amount owing. The CRA responded to the complaints in a letter dated November 7, 2023. Finally, the taxpayer filed his request for an extension of time to file the notice of appeal on July 30, 2024.

Subject of the request for extension of time and the notice of appeal

The exact subject to which the taxpayer filed his application for an extension of time to file the notice of appeal is confusing. The taxpayer, on the one hand, insisted that he appealed to the CRA's letter dated November 7, 2023, responding to his complaints, not the underlying Notice of Confirmation dated April 8, 2021, and received by him in November 2021. However, the CRA's letter dated November 7, 2023, was not filed into evidence. On the other hand, he requested the Tax Court to fully resolve the amount owing under the Notice of Confirmation dated April 8, 2021.

Writing off a tax debt is not within the Tax Court's jurisdiction

With regards to the first issue that the taxpayer appealed, the CRA's letter dated November 7, 2023, responding to his complaints, the taxpayer requested that the Tax Court recognize the cheque as the final settlement of the tax debt and thus that the CRA was estopped from making further collection.

The Tax Court held that its jurisdiction is limited to examining whether the CRA had correctly determined the amount of tax payable. Writing off a tax debt is different and is not a relief that the Tax Court has jurisdiction to grant.

The appeal was well past the deadline

Since the CRA's letter responding to the taxpayer's complaints could not be a subject to the request for extension of time and the notice of appeal, the Tax Court turned to the Notice of Confirmation dated April 8, 2021, and received by the taxpayer in November 2021.

The Tax Court reiterated that the conditions to request an extension of time to appeal an assessment are as follows:

• The request must be made within one year after the expiration of the 90-day deadline to appeal; and
• The taxpayer must demonstrate that:
• • Within the 90-day period, the taxpayer was unable to act or instruct another to act;
  • It would be equitable to grant the request;
  • The request was made as soon as practicable; and
  • There are reasonable grounds for the underlying appeal.

For the taxpayer's benefit, if the Tax Court accepted that the taxpayer received the Notice of Confirmation on November 30, 2021, the 90-day deadline to file an appeal would be on February 28, 2022, and the 90-day plus-one-year deadline to request an extension of time would be on February 28, 2023. Here, the taxpayer submitted his request on July 30, 2023, long past the deadline.

As for the remaining conditions, the burden is on the taxpayer to prove his case. However, the taxpayer had not done so. He did not seek to challenge the underlying Notice of Confirmation; instead, he sought to challenge the CRA's letter responding to his complaints. The taxpayer had failed his burden.

David J Rotfleisch, CPA, JD is the founding tax lawyer of Taxpage.com and Rotfleisch & Samulovitch P.C., a Toronto-based boutique tax law corporate law firm and is a Certified Specialist in Taxation Law who has completed the CICA in-depth tax planning course. He appears regularly in print, radio and TV and blogs extensively.  

With over 30 years of experience as both a lawyer and chartered professional accountant, he has helped start-up businesses, cryptocurrency traders, resident and non-resident business owners and corporations with their tax planning, with will and estate planning, voluntary disclosures and tax dispute resolution including tax audit representation and tax litigation. Visit www.Taxpage.com and email David at david@taxpage.com.

Read the original article in full on Tax Law Canada. Author photo courtesy Rotfleisch & Samulovitch P.C. Top image: Ottawa, Ontario, Canada - October 8, 2020: A sign for the Tax Court of Canada at 200 Kent Street in Ottawa, iStock ID 1283116731.