CRA sent me a proposal letter after an audit — what should I do?

A proposal letter (sometimes called an "auditor's proposal") is not a reassessment — it is CRA's notice that it intends to make adjustments to your return. You generally have 30 days to respond, though you can request more time. This is a critical opportunity you should not ignore.

Review the proposal carefully to understand which items CRA is adjusting and why. If you have additional documents or explanations that address the auditor's concerns, this is the time to provide them. A well-prepared written response can sometimes persuade the auditor to reduce or eliminate proposed adjustments before they become a formal reassessment. Once a Notice of Reassessment is issued, your options move to the objection process, which is more formal and takes longer.

If the amounts are significant, consulting a tax lawyer or accountant before responding is strongly advisable. Professionals familiar with CRA audit practice can assess whether CRA's legal position is correct, identify documentation gaps, and frame your response in a way that addresses the auditor's concerns directly without inadvertently conceding points.