Generally, if you owe income taxes, CRA cannot take collection action without first letting you try to prove you don't owe the money. You have a right to file an objection with CRA's Appeals Branch and, if you're still unsatisfied, you can appeal to the Tax Court of Canada. This whole process can easily take two years or more. During all that time, normally, CRA may not try to collect the amount it thinks you owe. Some call these restrictions "collection stay rules". They're in ITA s. 225.1.
There are exceptions to these rules, though. They don't apply to amounts that you were supposed to withhold and remit, such as EI or CPP premiums and contributions. They don't apply to 50% of the amount CRA claims a large corporation owes or 50% of the amount of a tax shelter donation credit claim that CRA disputes. They don't apply to GST remittances or refunds either. And, in rare cases, CRA may apply to a Federal Court judge or a provincial superior court justice for a "jeopardy order", allowing early collection action. The CRA applies for these jeopardy orders under ITA s. 225.2 on an ex parte basis, i.e., "without [the other] party", so that the tax debtor cannot rush to hide the property before CRA gets the order.
In this case, CRA did get a jeopardy order, allowing it to put a lien on the Tassones' home. The Tassones applied to the FC to have the lien removed, on the basis that the CRA had not honestly shown that collection of the tax debt was in jeopardy. The Tassones didn't file "an affidavit in support of this application and thus avoided cross-examination by the respondent." (Para. 4.)
" The case law recognises that the Minister must make full and frank disclosure in an ex parte application for a jeopardy order and that failure to do so will result in the order’s being set aside in a review application made under subsection 225.2(8) of the ITA even if the evidence before the Court demonstrates that there was a valid case for the order being issued. Thus, lack of full and frank disclosure is a stand-alone basis for review of an ex parte jeopardy order (Re Papa at para 21). However, full and frank disclosure does not require the disclosure of material that is irrelevant to whether or not a jeopardy order should be issued (Minister of National Revenue v Rouleau (1995), 101 FTR 57, 95 DTC 5597 (Fed TD) at para 10)."
As Gleason J. decided that "the applicants have been unable to point to any relevant fact that the Minster failed to disclose on the ex parte application", she rejected their challenge of the jeopardy order. (Para. 15)
Another way to challenge the jeopardy order is to show that "that there are reasonable grounds to doubt that the collection of all or any part of the amount assessed would be jeopardised by a delay in the collection of that amount." (Para. 16) But there were many reasonable grounds for saying that collection was jeopardized. (Para. 17.) So, CRA protected its collection action.
See Tassone v. Canada (National Revenue), (2013 FC Gleason)