Advice from CRA When Tax Returns Are Reviewed

Practitioners know that CRA reviews taxpayers’ returns regularly, even when they have been prepared by professional accountants. However, clients can become anxious when they receive a letter or a telephone call from CRA asking for information, receipts, or documents to support a claim made on their income tax returns.

CRA has provided a few FAQs to help you communicate with your clients about the review process.

1. What's a review?

Reviews help make sure tax returns are accurate and that taxpayers are paying the correct amount of tax and getting the benefits and credits they are entitled to, so that the Canadian tax system is fair for all Canadians. Reviews confirm that income amounts, deductions and credits are reported correctly, and can be properly supported. It's important to know that a review is not a tax audit. In most cases, it's simply a routine check to ensure that the information provided on a return is correct. If a taxpayer receives a letter or a phone call telling them that their income tax return is being reviewed, don't panic. CRA reviews approximately three million tax returns every year under its income tax review programs.

2. When should I respond?

It's important that the taxpayer reply and send all the information requested as soon as possible. This will help CRA review their file quickly. If a taxpayer receives a request from CRA asking for documents or receipts, they should reply within the timeframe provided. CRA will tell the taxpayer how to send their documents. Make sure to include all the information CRA asks for, and that the copies of documents are clear and easy to read. If the taxpayer doesn't reply, CRA may adjust their tax return and claims might be disallowed.

3. How long do should I keep my receipts and records?

Taxpayers are required to keep all tax documents for at least six years from the date they file their tax return, including receipts and related documents to support expenses, deductions, or tax credits claimed.

4. How do I make sure I receive all CRA mailings?

Taxpayers can make sure they are getting all CRA letters, notices, and other important correspondence by letting CRA know right away if they move or change address. Updating personal information is easy to do in My Account and MyCRA.