CRA Requirement for Information Letters: What They Mean in Ontario

Most CRA document requests are informal — a letter asking you to send in a receipt or explain a transaction. A Requirement for Information is different. It's a formal legal demand issued under the Income Tax Act, and unlike an informal request, non-compliance carries real legal consequences of its own, separate from whatever the underlying audit finds.

If you've received a letter labelled as a Requirement (sometimes called an RFI), it's worth understanding exactly what makes it different, and why ignoring it is far riskier than ignoring an ordinary audit letter.

What Makes a Requirement Different From a Regular Request

An ordinary audit or review letter is a request — the CRA is asking, and while non-response has consequences for your audit (denied claims, an unfavourable reassessment), it isn't itself an offence. A Requirement for Information is a formal demand backed by statutory authority under the Income Tax Act. The CRA can use this power to compel a taxpayer — or in some cases a third party, such as a bank — to provide specific documents or information within a stated time.

Key differences:

• Legal basis: A Requirement is issued under specific statutory authority in the Income Tax Act, not just administrative practice.
• Who can be compelled: A Requirement can be directed at the taxpayer under audit, or at a third party who holds relevant records (a bank, a business partner, a customer).
• Consequences of non-compliance: Failing to comply with a valid Requirement can expose the recipient to its own legal consequences, separate from the audit itself — this is a meaningfully higher-stakes document than a routine letter.

Why the CRA Uses This Tool

The CRA typically reaches for a formal Requirement when:

• An informal request has already gone unanswered or has been only partially satisfied
• The information needed is held by a third party rather than the taxpayer directly (for example, banking records relevant to a taxpayer's income)
• The audit has escalated in seriousness, and the CRA wants to ensure a clear, enforceable paper trail of what was demanded and when

Receiving a formal Requirement, rather than an informal letter, is generally a signal that the audit has moved into a more serious phase and warrants a correspondingly serious response.

What to Do If You Receive One

1. Read it carefully and note the deadline. Formal Requirements specify what's demanded and by when — treat that deadline as firm, not aspirational.
2. Confirm what's actually being asked for. Requirements can be broad; understand precisely what documents or information fall within its scope before responding.
3. Get legal advice before responding, especially if:

• You believe some of what's being demanded is protected by solicitor-client privilege
• You're unsure whether the Requirement is validly issued or improperly broad
• Compliance would require disclosing information about a third party (a business partner, a family member) that raises its own concerns

1. Don't simply refuse without a documented, defensible reason. Unlike an informal request, walking away from a valid Requirement is not a neutral choice — it can trigger its own enforcement consequences.
2. Respond completely, not selectively. Partial compliance can be treated the same as non-compliance if it doesn't satisfy what was actually demanded.

What a Requirement Cannot Reach

Not everything is fair game, even under a formal Requirement. Communications between you and your lawyer made for the purpose of seeking or giving legal advice are generally protected by solicitor-client privilege, and privileged documents can be withheld — though the process for asserting privilege against a CRA demand has its own procedural steps, and getting it wrong can waive the very protection you're trying to claim. If you believe privilege applies to some of what's been demanded, that's a strong reason to get legal advice before responding rather than after.

Third-Party Requirements: When the CRA Asks Someone Else About You

A Requirement doesn't only go to the taxpayer under audit. The CRA can direct one at a bank, business associate, or other third party who holds records relevant to your tax affairs. If you learn that a Requirement has been sent to your bank or a business contact regarding your own tax matters, that's a signal the audit has broadened, and it's a good time to involve a lawyer if you haven't already.

Frequently asked questions