A CRA letter has arrived: what it is, and what to do first
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A review is not an audit, and a reassessment starts a 90-day clock. Work out which one you have before you answer it.
Download the checklist · text file
What you have received
| What arrived | What it usually means | What comes next |
|---|---|---|
| Education letter | The CRA has noticed a possible error or omission, such as unreported income or a claim that may be ineligible | No penalty by itself. You can correct the return. |
| Review letter | A routine check that the information on a return is correct, with a request for documents | You send the documents asked for, and the CRA closes the review or adjusts the return. |
| Audit | A closer examination of your books and records | The auditor asks for records and may ask to meet. |
| Notice of assessment or reassessment | The CRA’s calculation of your tax, or a changed calculation | You have 90 days to object if you disagree. |
The first four things to do
- Read the letter for the date and for the deadline it gives you.
- Do not ignore it. A late reply does not stop penalties or interest.
- If you cannot meet the deadline, phone the number on the letter before it passes and ask for more time.
- Keep a copy of everything you send, with the date, and a note of who you spoke to.
What to send
Send what the letter asks for, and no more. That is usually some of: bank statements, invoices, receipts, the general ledger and payroll records for the period. If you cannot find a document, say so, because the CRA will suggest another way to support the item.
Reconciled books produce these quickly. When the books are behind, the records have to be rebuilt first, and that takes longer than the deadline usually allows.
If you disagree with a reassessment
A notice of objection has to be filed within 90 days of the date the notice of assessment was sent. For an individual other than a trust, the deadline is the later of that and one year after the return’s filing deadline. If you miss it, you can apply for an extension, but only within one year after the objection deadline. The CRA’s form for this is the T400A.
If you cannot meet an obligation
The CRA can cancel or waive penalties and interest in some circumstances beyond your control, such as illness, a disaster, or financial hardship. You apply on Form RC4288, with supporting documents.
If you find the error first
A mistake you find yourself can go through the Voluntary Disclosures Program, which can reduce penalties and part of the interest. The relief is highest when you apply before the CRA contacts you, and partial relief can still be available afterward. The Voluntary Disclosures Program guide explains how the two differ.
Is a CRA review the same as an audit?
No. A review is usually a routine check that the information on a return is correct. An audit is a closer examination of your books and records.
How long do I have to answer a CRA letter?
The letter gives a deadline. If you cannot meet it, phone the CRA before it passes and ask for more time.
How long do I have to file an objection?
90 days from the date the notice of assessment was sent. An extension can be requested within one year after that deadline.
Can the CRA cancel my penalties?
In some circumstances beyond your control, yes, under its taxpayer relief provisions. You apply on Form RC4288, and the CRA decides each request.
Can my bookkeeper speak to the CRA for me?
Only with your authorization. The CRA needs your permission before it discusses your account with anyone else.
Behind on returns: the Voluntary Disclosures Program →
T2 deadline and late penalties →
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