CRA Reviews: What They Mean and How to Respond
Receiving a review request from the Canada Revenue Agency (CRA) can be concerning, but a review doesn’t necessarily mean you’re facing a full audit.
A CRA review generally focuses on specific amounts or claims reported on a tax return. Understanding what’s being requested and responding clearly and on time can help keep the process moving.
What is a CRA review?
During a review, the CRA may ask for documents supporting specific items on your return, such as reported income, deductions, expenses, or tax credits.
The request will typically identify the information the CRA wants to verify and provide a deadline for your response.
Why might your return be reviewed?
There are several reasons the CRA may select information on a return for review. The important point is that receiving a request doesn’t automatically mean something is wrong.
If your return is selected, focus on understanding exactly what information has been requested rather than providing documents that aren’t relevant to the review.
How should you respond?
Timing and organization matter. Review the request carefully, note the response deadline, and gather the supporting documents that relate to the items being reviewed.
Clear, complete documentation can make it easier for the CRA to understand how an amount reported on your return was determined. Missing or incomplete information may result in additional questions or adjustments.
If you’re unable to provide information by the stated deadline, address the situation promptly rather than letting the request go unanswered.
Good records make a difference
The best time to prepare for a potential CRA review is before you receive one.
Keep organized records throughout the year, including receipts, invoices, statements, agreements, and other documents that support amounts reported on your tax returns.
Strong recordkeeping can make responding to a review faster and help support your tax position if questions arise.
Don’t ignore a review request
A CRA review is manageable, but deadlines and documentation requirements shouldn’t be overlooked. Read the request carefully, respond with the information requested, and seek advice if you’re unsure about what to provide.
Davidson can help you understand a CRA review request, organize the supporting information, and navigate communication with the CRA.
This article is provided for general information only and should not be considered accounting, legal, or tax advice. Your individual circumstances may differ. Contact your trusted advisor for guidance specific to your tax needs.
