A letter from the Canada Revenue Agency can be unsettling, but it does not always mean you are in trouble. The first step is simple: open it, read it carefully, and note the deadline. Many CRA letters ask for a response within 30 days, and ignoring the letter is the one response that almost always makes things worse.
Do not ignore the letter
Start by checking what the CRA is asking for. It may be asking for a missing slip, a receipt to support a claim, or clarification about an amount on your return. Gather the letter, the return it refers to, and any supporting documents, and keep copies of everything you send.
If the deadline is close and you are still gathering documents, do not simply let it pass. Contact the CRA or ask a representative to contact them on your behalf, explain where things stand, and ask what options are available. A clear, early response is much easier to manage than a missed deadline.
Reviews versus audits
Not all CRA contact is an audit. Understanding the difference helps you respond in the right way:
- Review: the CRA asks for documents to verify a specific claim or amount. It is often narrower in scope.
- Audit: the CRA examines your books, records, and returns in more detail, and may cover more than one year or tax type.
In both cases, respond only to what is asked, provide clear documents, and keep your answers factual. Sending extra material or records that could create confusion is rarely helpful.
Reassessment periods to know
The CRA generally has a limited time to reassess a return, but the limit depends on the type of taxpayer:
- Individuals: generally 3 years from the original notice of assessment.
- Corporations: generally 4 years from the original notice of assessment.
- No limit: in cases of fraud, misrepresentation, or failure to file a return.
These periods are a general guide. The exact rules can depend on the facts, so if a reassessment arrives, check the details before assuming it is out of time.
What if you find a mistake?
If you realize a return was wrong or incomplete, the Voluntary Disclosures Program may allow you to correct it before the CRA contacts you about that issue. Voluntary disclosure has conditions and is not suitable in every case, so it is worth getting advice before filing a disclosure. The key point is that correcting a mistake voluntarily is usually better than waiting for the CRA to find it.
Good records make both reviews and voluntary corrections easier. If your books need work, our Accounting & Bookkeeping services can help you organize the records that support your position.
How CRA representation works
A CRA representative can act on your behalf, communicate with the CRA, gather and submit documents, and help you understand what is being asked.
Representation does not mean ignoring the issue. It means having someone experienced handle the correspondence, keep track of deadlines , and present your records clearly.
For corporations facing CRA correspondence or an audit, our corporate tax filing services in Canada can help keep the T2 return and supporting records aligned with what the CRA is asking about.
Related reading from ABS
Personal Tax Filing in Canada: Deadlines, Documents, and Refunds
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Read more →Talk to ABS about CRA correspondence
ABS offers CRA e-filer and client representative services in Canada, with a CPA-certified team and Canada-wide virtual service. If you have received a CRA letter, review, or audit notice, contact ABS to book a free 15-minute consultation.