Case Commentary: Onischuk v. The King – Tax Court rules cannot override CRA's statutory requirements

Self-Represented Taxpayer Challenges Nil Assessments

In February 2025, the Tax Court of Canada delivered the ruling on Onischuk v. The King, 2025 TCC 17. Daniel Onischuk was assessed for nil tax owing for the 2011-2012 tax years and received a refund of $627 for the 2013 tax year. However, he filed a notice of objection for the 2011-2013 tax years because he wished to dispute the denial of his business losses by the Canada Revenue Agency.

Business loss is a type of non-capital loss, that can be applied to offset any source of income and can be carried backward for three taxation years and forward for 20 taxation years. The CRA refused to consider the objection because nil assessments (i.e. nil tax owing, interest, or penalty) are not eligible for objection and invited Onischuk to instead request for a loss determination under subsection 152(1.1) of the Income Tax Act.

A determination of loss is treated as an assessment and thus can be objected to or appealed from. Onischuk refused to take the loss determination route and insisted on challenging the nil assessments. Because he missed the appeal deadline, which is 90 days after the CRA's decision on the objection, Onischuk applied to the Tax Court for an extension of time to file the appeal to the Tax Court.

Grounds for Granting an Extension of Time to File an Appeal to the TCC

For an application for an extension of time to file an appeal to the Tax Court of Canada (TCC) to be successful, the taxpayer must demonstrate that:

• The taxpayer was unable to act or instruct another to act within the original appeal deadline;
• There was a bona fide intention to appeal;
• Given the reasons in the application, it would be just and equitable to grant the extension of time;
• The application was made as soon as circumstances permitted; and
• There are reasonable grounds for the appeal.

In the Onischuk case, the Tax Court took issue with the grounds for the appeal, which is an appeal of nil assessments.

Nil Assessment Cannot be Objected to or Appealed From

Onischuk, representing himself, relied on subsection 21(3) of the Tax Court of Canada Rules (Informal Procedure), which reads: "The Court may, where and as necessary in the interests of justice, dispense with compliance with any rule at any time."

He argued that he was treated unfairly by the CRA because the CRA hid behind the protection of nil assessments in order to avoid being challenged by him and thus that granting the extension of time for the appeal is in the interests of justice. He also relied on sections 6, 7, and 12, and subsection 15(1) of the Charter of Rights and Freedom to support his interpretation of subsection 21(3).

The Tax Court of Canada rejected Onischuk's argument. Case law has well established that a nil assessment is not an assessment and therefore it cannot be objected to or appealed from.

The Tax Court also reiterated the principle, not limited to tax law, that court rules cannot be used to override statutory requirements. For instance, rules of the Tax Court and of the Federal Court have been found in case law to be ineffective in efforts to extend various deadlines in the Income Tax Act, the Unemployment Insurance Act, and the Customs Act. If otherwise allowed, court rules will step beyond its intended purpose of regulating the practice and procedure of the courts.

It is quite perplexing for Onischuk, a self-represented litigant, to ignore the readily available option of requesting a loss determination and instead insist on challenging a well-established rule in jurisprudence. He might[have been] overconfident in his understanding of the law or simply wanted to test out his interpretation. Nevertheless, a taxpayer should logically avoid doing this and better consult with experienced Canadian tax litigation lawyers to make proper use of tax challenges and litigation.

Normally, you can object to the assessment with the CRA and then appeal to the Tax Court. However, nil assessment is an exception because it is not an assessment and hence cannot be objected to or appealed from. 

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 Page. Author photo courtesy Rotfleisch & Samulovitch P.C. Title image: TUREK90 from Pixabay.