What Happens If I Ignore a CRA Audit Letter in Canada?
This answer covers Canadian federal tax law, which applies in every province.
Ignoring a CRA audit letter rarely makes the audit go away, and it can make things harder. Missing or hard-to-find records can cause delays, and the length of an audit depends on the condition of the records, the scope and how much co-operation there is. The CRA is also not bound by the information you supplied and may assess tax payable even where information was inaccurate.
If a formal requirement for documents or information goes unanswered, a judge can order compliance on the Minister's summary application, and refusing that order can be found to be contempt of court. Interest on unpaid tax runs at the prescribed rate for as long as it is outstanding, and the rate for 1 October to 31 December 2026 is 7%.
To recover, respond as soon as you can and gather the records requested. Acting quickly to fix a delay is a factor the CRA weighs if you later ask for penalty or interest relief. If you disagree with an assessment, an individual's (other than a trust'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. A lawyer or accountant can help.
Key takeaways
- Records that are not provided or are hard to find can cause delays in an audit.
- The Minister is not bound by the information supplied and may assess tax payable even if the information was inaccurate.
- A judge can order compliance with an audit requirement, and refusing the order can be found to be contempt of court.
- Acting quickly to fix a delay or omission is a factor the CRA weighs when you ask for penalty or interest relief.