Got a Letter from the CRA? Reviews, Audits, and What to Do Next

Few things raise a business owner’s heart rate like an envelope (or a My Account notification) from the Canada Revenue Agency. The instinct is to assume the worst: an audit, a big bill, maybe worse.

In reality, most CRA letters are routine. Many are simply requests for supporting documents. Some are information slips or confirmations. Even full audits are a normal part of a self-assessment tax system, and the vast majority end without drama when the taxpayer responds promptly, completely, and professionally.

This guide explains the most common types of CRA correspondence, what each one means, which deadlines matter, how to respond, and what your options are if you disagree with the outcome.

Key takeaways

• Read the letter carefully and note every deadline. Missing a CRA deadline is often more damaging than the issue itself.
• Most letters are reviews: requests for documents to support a claim. Respond completely and on time.
• If you disagree with an assessment or reassessment, you generally have 90 days from the date of the notice to file a Notice of Objection (individuals have an alternative deadline of one year after the filing due date, whichever is later).
• You can authorize a representative to deal with the CRA on your behalf.
• The CRA never demands payment by gift card, prepaid credit card, or cryptocurrency, and never threatens immediate arrest. Verify any suspicious contact independently.

First: is it really the CRA?

Before anything else, confirm the contact is legitimate. CRA impersonation scams are common in the GTA.

The CRA may:

• Send letters by mail or post them in My Account or My Business Account, often with an e-mail notification telling you to log in.
• Call you to discuss a review, audit, or collection matter, and verify your identity.
• Ask for supporting documents.

The CRA will never:

• Demand immediate payment by gift card, prepaid credit card, e-transfer to an individual, or cryptocurrency.
• Threaten arrest, deportation, or police involvement.
• Send e-mails with links asking you to enter personal or banking information to receive a refund.
• Use aggressive or threatening language.

If you’re unsure, don’t use the phone number or link in the message. Log into your CRA account directly or call the CRA using the number on its official website. If you have a representative, ask them to check.

The most common types of CRA correspondence

Notice of Assessment (NOA)

After you file a return, the CRA issues a Notice of Assessment confirming what it assessed: your income, tax payable, refund or balance owing, and, for individuals, RRSP deduction limits and other carryforward information. Compare it to your return. If it matches, file it away. If it doesn’t, find out why.

Pre-assessment or post-assessment review

These are the most common “uh oh” letters, and they’re usually straightforward. The CRA asks you to provide documentation for specific claims, such as medical expenses, child care, moving expenses, charitable donations, rental expenses, or business expenses. Reviews are generally desk-based and limited in scope.

What to do: gather exactly what’s requested, organize it clearly, include a short explanation where helpful, and submit it before the deadline, usually through the CRA’s online portal.

Matching program letters

The CRA compares your return to information slips from employers, banks, and other third parties. If income appears on a slip but not on your return, you may receive a proposed reassessment. Often, the issue is a forgotten T5 or T4A. Sometimes, it’s a slip issued in error.

Request for information on GST/HST

The CRA may review HST returns, especially those claiming refunds, before or after processing. They might ask for sales invoices, purchase invoices supporting ITCs, and general ledger details.

Payroll review (PIER)

A Pensionable and Insurable Earnings Review compares your T4 reporting to the CPP and EI amounts that should have been deducted. If there’s a shortfall, the CRA may assess the employer for both the employee and employer portions.

Audit letter

An audit is broader and deeper than a review. A CRA auditor examines books and records, often covering a full year or more, and may focus on specific areas or the business as a whole. Audits can involve income tax, GST/HST, payroll, or a combination.

Proposal letter

At the end of an audit, the auditor usually issues a proposal letter outlining proposed adjustments and giving you a window (typically 30 days) to respond with additional information or arguments before a reassessment is issued. This is an important opportunity to resolve issues before they become formal.

Notice of Reassessment

A reassessment changes a previously assessed return. It starts the clock for filing an objection.

Collections notices and Requirements to Pay

If tax remains unpaid, the CRA’s collections division may contact you, propose a payment arrangement, or, in more serious cases, issue a Requirement to Pay to your bank, employer, or customers. These require immediate attention.

Demand to file

A formal demand to file an outstanding return. Ignoring it can lead to additional penalties and, in some cases, prosecution.

How to respond to a review or audit

1. Read the letter carefully

Identify the tax year, the tax type, the specific items being reviewed, the documents requested, and the deadline. Note the reference number and the name of the CRA officer.

2. Don’t ignore it, and don’t miss the deadline

If you can’t meet the deadline, contact the CRA before it passes to request an extension. Officers often grant reasonable extensions if asked in advance. If you don’t respond, the CRA will typically disallow the claim and reassess.

3. Consider getting professional help

For simple document requests, many people respond themselves. For audits, large amounts, business returns, or situations where you’re unsure whether your records support the claim, a representative can help you understand what the CRA is looking for, organize documentation, and communicate effectively.

4. Provide what’s asked, organized and complete

• Answer the specific questions asked.
• Provide clear, legible copies, never originals.
• Organize documents to match the CRA’s list.
• Include a short cover letter summarizing what you’re providing.
• Keep copies of everything you send and a record of the date sent.

5. Be accurate and professional

Be truthful. Don’t guess or speculate. If you don’t know an answer, say you’ll find out. In audits, it’s generally wise to answer the questions asked without volunteering unrelated information, and to route communication through your representative if you have one.

6. Review the outcome

When you receive the result, compare it carefully to what you submitted. Mistakes happen on both sides.

Authorizing a representative

You can authorize an accountant or other representative to deal with the CRA on your behalf. Individuals and businesses can do this through the CRA’s online services (Represent a Client) or with the appropriate authorization form. Authorization levels vary, from viewing information only to full ability to make changes and discuss matters.

Having a representative means the CRA can communicate directly with someone who understands the issues, and you aren’t trying to interpret technical requests on your own.

If you disagree: the objection process

Notice of Objection

If you disagree with an assessment or reassessment, you can file a Notice of Objection. The deadline is generally:

• Individuals (and graduated rate estates): the later of 90 days after the date of the notice of assessment or reassessment, or one year after the filing due date for the return.
• Corporations and other taxpayers: 90 days after the date of the notice.

Objections can be filed online or using Form T400A. The objection should clearly state the facts and reasons for your disagreement. It’s reviewed by the CRA’s Appeals branch, which is separate from the audit division.

Collection while objecting

For most income tax amounts, the CRA generally won’t take collection action on disputed amounts while an objection is under review, although interest continues to accrue. Some taxpayers choose to pay disputed amounts to stop interest, knowing they’ll be refunded with interest if they succeed. Different rules apply for some debts, such as GST/HST and source deductions, where collection may continue.

Tax Court of Canada

If the objection doesn’t resolve the matter, you can appeal to the Tax Court of Canada. There’s an informal procedure for smaller disputes and a general procedure for larger ones. At this stage, legal representation is often appropriate.

Extension of time to object

If you miss the objection deadline, you may be able to apply for an extension of time, generally within one year after the original deadline, with reasons for the delay.

Relief options

Taxpayer relief

The CRA can cancel or waive penalties and interest in certain situations, such as circumstances beyond your control (serious illness, natural disaster, or a CRA error or delay), or financial hardship. Requests must generally be made within ten calendar years from the end of the year in which the tax year or fiscal period ended.

Voluntary Disclosures Program (VDP)

If you have unreported income, unfiled returns, or other non-compliance and the CRA hasn’t already started an audit on the issue, the VDP may provide relief. Since October 1, 2025, unprompted applications can receive 100% penalty relief and 75% interest relief, while prompted applications can receive up to 100% penalty relief and 25% interest relief, for up to the ten most recent tax years. Coming forward before the CRA contacts you can make a significant difference.

Payment arrangements

If you owe money you can’t pay in full, contact the CRA to discuss a payment arrangement. Proactively engaging usually leads to better outcomes than waiting for collections action.

How to reduce your chance of problems

No one can guarantee you won’t be reviewed. Some reviews are random. But good practices reduce both the likelihood and the pain:

• Keep organized records for at least six years, with receipts and invoices for every significant expense.
• Reconcile your books monthly.
• Make sure your returns match your slips. Check My Account for slips before filing.
• Claim only what you can support.
• Keep business and personal finances separate.
• Be consistent: unusual year-over-year swings without explanation can attract attention.
• File and pay on time.
• Keep your CRA contact information current, so you receive correspondence promptly.

Reassessment periods

The CRA can generally reassess:

• Individuals and CCPCs: within three years from the date of the original notice of assessment.
• Other corporations: within four years.

These periods can be extended in some situations, such as misrepresentation due to neglect, carelessness, or wilful default, or certain specific transactions, and can be waived by the taxpayer. This is one reason the CRA’s record retention requirement is six years.

Frequently asked questions

How Solstice Partners can help

Solstice Partners supports individuals and businesses across Toronto and the GTA with CRA reviews, audits, PIER assessments, GST/HST reviews, objections, voluntary disclosures, and relief requests. We can be authorized as your representative, organize your documentation, communicate with the CRA on your behalf, and help you put better records in place so the next letter, if it comes, is easy to answer.

If you’ve received a CRA letter and aren’t sure what it means or how to respond, book a consultation with Solstice Partners as soon as possible, ideally well before your response deadline.

This article provides general information current as of October 2026 and is not legal or tax advice. CRA procedures, deadlines, and relief programs vary by situation and change over time. If you’ve received a CRA notice, act promptly and consult a qualified professional. For matters before the Tax Court, consider legal counsel.