When Can the CRA Reassess Me?

Worrying about getting your tax return right is natural. The Canadian system is built around self-assessment — the taxpayer declares his income and deductions in good faith, and the checks and balances keep everything on track. The Canada Revenue Agency (CRA) doesn’t have just one reassessment step, it has several, all of which fall short of the dreaded, and rare, audit. The reassessment process starts each year in February, as soon as returns start flowing in.

The matching program

Also occurring after the notices of assessment, the matching program stretches from October to March of the following year. This round of reviews matches up your information with submissions from other sources. For example, your employer issues your T4 slip and also submits a copy to the government. The matching program does just that — it matches what you report with the information your employer submits. This is an important step, as more returns are submitted online, without supporting documents. The matching program also supports other government programs, such as the Canada Child Benefit and GST/HST credit. These and other programs are driven by your tax return and benefits vary based on your income. Changes with this review also create a notice of reassessment.

Tax review timeline

The CRA can go back four years to look at past returns in general. However, if there’s a suspicion of fraud, the CRA can look back farther. A CRA auditor can also file a waiver to extend the four-year deadline, and the waiver will explain why the auditor thinks an exception should be made. Under the Income Tax Act, you’re required to keep tax records for six years after the end of the tax year for which these apply. For example, all your records and receipts for the 2015 tax year may be destroyed at the end of 2021.

Canada Revenue Agency: Types of Reviews

• Emily O’Neil, Tax Preparer; London, Ontario