T491 Tax Form: Notice of Reassessment in Canada

What is the T491 tax form?

It is called a Notice of Reassessment. You will receive such a notice after your return has been audited or after your return has been adjusted through the Beneficial Client Adjustment Initiative. 

What is the Beneficial Client Adjustment Initiative?

It is part of the Matching Program that the CRA conducts from September to March as part of the assessment process. By comparing your return to third-party sources, the CRA looks for credits that have not been claimed as part of tax deducted at source and Canada Pension Plan contributions. If your return is adjusted, you will receive a Notice of Reassessment and a refund if applicable.  

What is the difference between a Notice of Assessment and a Notice of Reassessment?

When you file your return, the CRA does a pre-assessment screening. They do a basic review and if they have any questions, they ask you to provide information or paper documentation for what you have claimed. When that screening is done, they send a Notice of Assessment to you. After an audit, the Notice of Reassessment will replace the Notice of Assessment you originally received. 

What is a tax audit?

Taxpayers are sometimes selected for an audit. If that happens to you, the CRA sends you a letter telling you when they want to start the tax audit and asking you for the information and documentation they need. After the audit, either there will be no change in your tax assessment or the CRA will send you a Proposal to Reassess letter. 

What does a Proposal to Reassess letter mean?

The letter will ask you for further information about the amounts being reassessed. The CRA will then send you a Notice of Reassessment indicating the additional taxes plus interest and penalties that you have to pay, if applicable. 

Is there anything I can do if I don’t agree with the decision?

When you receive a Notice of Reassessment, you have 90 days (from the mailing date) to file a Notice of Objection with the Appeals Division of the CRA. If you are not successful, you can appeal to the Tax Court of Canada.