Can the CRA go back and audit tax years that are already closed?

Canada's Income Tax Act sets a "normal reassessment period." For most individuals and Canadian-controlled private corporations, CRA generally has three years from the date of the original Notice of Assessment to reassess a tax year. For larger corporations and certain other filers the period is four years. Once these windows close, a year is said to be statute-barred and CRA ordinarily cannot reassess it.

However, there are important exceptions. CRA can go back beyond the normal period if you filed a misrepresentation attributable to neglect, carelessness, wilful default, or fraud. There is no time limit at all for reassessing fraud. CRA can also reopen any year if you waive the normal reassessment period in writing — something auditors sometimes request.

Some situations — such as undisclosed foreign income or participation in a tax shelter — regularly trigger reassessments beyond the standard window because CRA considers them misrepresentations. If you receive a reassessment for what you believe is a statute-barred year, a tax lawyer can assess whether the misrepresentation exception truly applies.