What Is the Difference Between a CRA Review and an Audit in Canada?
This answer covers Canadian federal tax law, which applies in every province.
A CRA letter can mean different things, so read it closely to see what it asks for and by when. A full audit involves the auditor contacting you by mail or phone, examining records on site or at a CRA office, and ending with no change, a reassessment owing more tax, or a refund. A letter asking only for a few documents may be narrower than a full audit, so check what it says and confirm it with the CRA or an advisor.
If it is an audit, the CRA gives no fixed length, and the time depends on the condition of your records, the scope of the audit and any delays from missing records. The CRA's practice is to allow 30 days to agree or disagree with the auditor's written proposal, but that is administrative practice, not a statutory deadline.
If you disagree, you can contact the auditor and then the auditor's team leader before objecting formally. A notice of objection has a statutory deadline: for an individual, the later of one year after the filing-due date and 90 days after the notice of assessment was sent. Whatever the letter, respond by its deadline and keep your records. A lawyer or accountant can help you assess what is at stake.
Key takeaways
- An audit involves contact by mail or phone, an examination of records, and an outcome of no change, a reassessment owing more tax, or a refund.
- The CRA gives no fixed audit length, and good records and co-operation reduce the time.
- The 30 days the CRA gives to respond to an auditor's written proposal is administrative practice, not a statutory deadline.
- An individual's notice of objection is due by the later of one year after the filing-due date and 90 days after the notice of assessment was sent.