Why does CRA review my tax information?
The CRA reviews your tax information for various reasons including but not limited to:
Random selection;
Comparison of figures reported by you to information received from third-party sources;
Special deductions or credits claimed and an individual’s tax history.
All of the tax returns filed are screened by the CRA’s computer system and may be subject to review at a later date. There is no set time line of when the CRA will review your tax information. You should keep all receipts and documents to support your claims for at least six years in case you are selected for review. (For more details about record keeping, please refer to the FAQ for “How long should you keep your income tax records?”.)
It is important to note that when your tax return is selected for review, it does not represent a tax audit (yet). However, depending on the information and the severity of the claim, a simple processing review of your tax return by the CRA can lead to a serious tax audit if not handled properly and professionally. If your return or tax information is being reviewed by the CRA, speak to us if you are unsure about how to deal with it and we will assist you throughout the process.
Please be mindful that there is a deadline to the CRA’s processing review letter. If you do not provide the information requested within the timeframe indicated on the letter, the CRA will deny or modify your claim based on the limited information available. A notice of reassessment will be issued to you, and it is usually also a “tax bill” sent by the CRA for you to pay. In some cases, in order to dispute the reassessments, you have to file a notice of objection to the Appeals Division. If you are not successful, you have the right to appeal the reassessments to the Tax Court of Canada. We will discuss the tax dispute process in more details in the next article.
If you have received a notice of reassessment for a claim that you think you have all the supports but unsure about how to proceed with them, speak to us and let us fight for you!
If you have any questions or comments, please feel free to contact us.
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