Can CRA Audit Me Years After I Filed if They Suspect Fraud or Misrepresentation in Canada?

This answer covers Canadian federal tax law, which applies in every province.

Yes, in some cases. Normally the CRA can reassess an individual only until three years after the earlier of the original notice of assessment and the original notification that no tax is payable. After that, tax, interest or penalties cannot be assessed unless a listed exception applies.

One exception is a misrepresentation attributable to neglect, carelessness or wilful default, or fraud, in filing the return or supplying information; then there is no fixed time limit. The later reassessment is allowed only to the extent it can reasonably be regarded as relating to the matter that triggered the exception. The CRA generally does not use this exception to reduce tax payable.

If you appeal, the burden of establishing misrepresentation lies on the CRA, which must show at least one misrepresentation a normally wise and cautious taxpayer would not have made, even if made in good faith. Once the right to reassess is established, the onus shifts to you on the amount. Other exceptions include a valid waiver and certain extended periods. A lawyer or accountant can look at your facts and the dates involved.