What is a notice of Pre-assessment?
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. CRA runs audits to examine the accuracy of your claims and determine if they require proof to check if you comply with the tax laws of Canada.
What is the Notice of Reassessment tax form?
A Notice of Reassessment is a more recent assessment from CRA to request more information about something that you have reported in your income tax return. It is sent weeks, months, or years after your first Notice of Assessment, which you usually receive within a couple of weeks after filing your tax return. You will receive the Notice of Reassessment after your return has been reviewed by CRA, changed by you, or through the Beneficial Client Adjustment Initiative. Revenue Québec may also send a notice of reassessment.
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?
Both notices are sent when more information is required to support claims in your income tax return. So, when do you receive different types of assessments:
· The Notice of Pre-assessment is sent prior to processing your tax return by CRA and before they confirm if you owe them taxes or if you will receive a refund.
· Notice of Assessment is sent after your return has been processed. It will include information regarding your refund or amount owing, your RRSP details, and any carry-forward amounts.
· The Notice of Reassessment is issued after you receive your Notice of Assessment only if CRA requires more proof of your claims. CRA has the right to reassess a return 3 years after filing it or 10 years if they suspect fraud.
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?
- If 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.
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