The 10-year limitation period during which the CRA can collect a debt under the Income Tax Act (Canada) is re-started if the debtor “makes a written acknowledgement” of it. The CRA has stated that merely filing an objection or an appeal to the Tax Court is a written acknowledgement of the debt. The Federal Court rejected this position in Harrison v. Canada (National Revenue), 2020 FC 772, at ¶85 and ¶90:
[85] In my view, this jurisprudence does not support an analysis which interprets a written acknowledgment, as that term is utilized in s 222(5)(a) and 222(6), such that the mere filing of an appeal in the Tax Court will automatically and in every case serve as an acknowledgment of a disputed, in whole or in part, tax debt by the appellant, thereby restarting the 10-year limitation period. Rather, if the filing of an appeal can potentially trigger those provisions, then whether it will do so is dependent upon the content of the subject appeal.
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[90] I agree with the Applicant’s submission that by filing an appeal to the Tax Court a taxpayer acknowledges only that the Minister has assessed a tax debt to exist, which the Minister deems to be a valid debt. In my view, the fact that the Minister deems the debt to be valid does not mean that the taxpayer acknowledges liability for that debt. The very purpose of filing the appeal is to challenge the validity of that assessment, in whole or in part. In the absence of an acknowledgment by the taxpayer that the disputed portion of the assessed debt exists and is valid, or put otherwise, when the appeal denies the validity of and therefore liability for the assessed debt, the filing of the appeal is not an “acknowledgment” of the debt.
