If you’ve just opened your mailbox and find a beige CRA envelope or have a notification from the Canada Revenue Agency’s My Account, don’t be intimidated. Here’s what you need to know about the different types of paperwork sent by the CRA.
Notice of Assessment
When your tax return is processed by CRA, they issue a statement that outlines your tax assessment summary (key line numbers and reported amounts such as Line 15000 – Total Income, and Line 43700 – Total Income Tax Deducted) as well as other important info. This statement is called a Notice of Assessment or NOA. If you file your return electronically via NETFILE, you can expect to receive your NOA in about two weeks. If you paper-file or mail in your return, you can expect your NOA in about 8 weeks.
Along with those line numbers and amounts, your NOA also contains the info you’ll need to know in future years. Unused amounts for capital loss carryforwards, tuition carryforwards, etc. are listed on your NOA, along with your RRSP Deduction Limit and the maximum amount you can contribute to your TFSA. If you participated in the Home Buyers Plan (HBP) or Lifelong Learning Plan (LLP), your required repayment information can also be found on your NOA. You might also find a request for instalment payments if you are required to make them during the current tax year.
If you discover an error on your Notice of Assessment, no need to worry. You can submit an adjustment or amendment request to have the error fixed. For example, if you realized after you filed your return that you forgot to include your child care expenses, an adjustment request is the way to go.
The Notice of Assessment also carries along with it a very important deadline. If you do not agree with the information on your Notice of Assessment, you have 90 days from the date it’s issued to appeal the information with the CRA under their complaints and disputes section, File an Objection.
Notice of Reassessment
If changes are made to your original tax return (either by you via an adjustment or by CRA), the updated figures appear on a Notice of Reassessment. Similar to an NOA, a Notice of Reassessment includes the tax summary but the changes for certain line numbers and amounts have been made are highlighted.
If you notice an error on your Notice of Reassessment, contact CRA directly again, as noted above under NOA.
Request for Information
Commonly mistaken for an audit, a Request for Information from the CRA is exactly what the name implies. The agency would like to see proof of a credit or deduction that appeared on your return and may require you to submit the supporting documents. Common information requests are for tuition receipts, medical expenses, and home office expense claims. As we file our income taxes without having to provide documentation, it is quite common for the CRA to request to see documents where you have a significant change from previous years. If you have a high claim amount of expenses such as medical expenses, significant moving expenses or charitable donations, you should be prepared for a Request for Information and have your documents ready to submit to CRA.
Respond to the request in a timely manner; do not ignore these requests. If you ignore these requests or do not respond by the due date on the letter, you will be reassessed and your claim for that particular credit or deduction denied. If you need more time to gather your documents for submission, you can call the number for the tax centre shown in your letter and request an extension.
If you’re a CRA My Account holder, submitting your scanned receipts is easy via the online portal. If you haven’t registered for a CRA My Account, you can submit your receipts to CRA either by mail or fax to the person who has requested the information. Make sure to keep copies for your files, and it’s always wise to let the person or tax centre at the CRA know that you have sent the documents, and maintain communication with them while the situation is being resolved.
It is not common for a taxpayer to be audited immediately upon filing your tax return unless there is something going on which has been a pattern, or if the information on the return is obviously far from accurate. Regardless, the first step is a Request for Information and to respond to that request in a timely manner. Ignoring the request won’t make it go away. In fact, if you do not make attempts to contact the auditor, it is extremely likely that they will deny your claim, assess you a balance outstanding and send you to Collections to collect that balance. At that point, getting in touch with the auditor can be very difficult. It is always best to start a conversation with the auditor and work with them to resolve the discrepancy quickly.
To learn more about the audit process, check out CRA’s webpage What you should know about audits.
References & Resources