- A review letter typically arrives as part of the CRA's routine verification programs, most commonly a matching program that cross-checks the slips and receipts you claimed against…
- An audit is a more comprehensive examination.
Two envelopes from the Canada Revenue Agency can look almost identical from the outside, yet mean very different things. A CRA review letter is a routine, often automated check — the kind that asks you to send in a receipt or a slip. A CRA audit is a broader, more formal examination of your tax affairs. Ontarians frequently conflate the two, which leads either to needless panic over a simple receipt request or to under-reacting to something more serious.
This article explains what separates a review from an audit, what triggers each, and how your response should differ.
What Is a CRA Review Letter?
A review letter typically arrives as part of the CRA's routine verification programs, most commonly a matching program that cross-checks the slips and receipts you claimed against information the CRA already has on file (from employers, financial institutions, or other third parties) or against a receipt-based claim like medical or charitable donation amounts.
Characteristics of a review letter:
- Usually narrow in scope — one or two specific line items, credits, or deductions
- Often triggered automatically by a mismatch or by claiming a credit that requires supporting documentation
- Generally asks you to mail or upload specific documents by a stated date
- Can happen before your assessment (pre-assessment review) or after you've already received your Notice of Assessment (post-assessment review)
- Does not usually involve an in-person meeting or a broader look at your whole tax history
What Is a CRA Audit?
An audit is a more comprehensive examination. Rather than checking one claimed amount against a slip, an auditor is testing whether your overall reported income and deductions are accurate and complete for one or more tax years.
Characteristics of an audit:
- Broader scope — can span multiple years, multiple types of income, or an entire business's books
- May involve interviews, site visits (for a business), and repeated rounds of document requests
- Can escalate into more intensive methods, such as a net worth analysis, where the CRA reconstructs income from your assets and spending rather than from your records
- Can result in a formal proposal letter before any reassessment is finalized
- Carries a real possibility of penalties, not just an adjustment, where the CRA identifies misrepresentation
Side-by-Side Comparison
| Review Letter | Audit | |
|---|---|---|
| Typical scope | One or two specific items (a receipt, a slip, a credit) | Broad — income, expenses, or an entire filing period |
| How it starts | Often automated matching against third-party data | Often selected by risk-scoring, red flags, or referral |
| Documents requested | Narrow and specific | Can expand significantly as the review proceeds |
| Contact method | Usually letter/mail or online request only | May include phone calls, meetings, or site visits |
| Possible outcomes | Claim confirmed, adjusted, or denied | Reassessment, and in some cases penalties |
| Escalation risk | Low, but unresolved issues can lead to further contact | Can escalate to net worth analysis or, rarely, criminal referral in serious cases |
How to Respond to a Review Letter
- Read exactly what's being asked for — usually a specific receipt, slip, or explanation
- Gather only that documentation; there's rarely a need to send unrelated records
- Respond by the stated deadline, using the method the letter specifies
- Keep a copy of everything you send, and confirm receipt if you can
- If the requested documentation genuinely doesn't exist (a lost receipt, for example), respond honestly rather than not responding at all — the claim may simply be denied or adjusted, which is a much smaller consequence than being reassessed later for non-response
Most review letters resolve with a simple confirmation, adjustment, or denial of the specific amount in question — they don't typically open the door to a broader look at your return unless the response itself raises new concerns.
How to Respond to an Audit Letter
An audit calls for more structure:
- [ ] Confirm the scope — which years, which return type, which issues
- [ ] Organize your own records and review them before sending anything
- [ ] Consider whether a lawyer or accountant should manage the response, particularly if the amounts or issues are significant
- [ ] Track every document sent and every communication with the auditor
- [ ] Treat a proposal letter as your opportunity to respond before a reassessment is finalized, not as the final word
When a Review Can Turn Into an Audit
A review letter can occasionally lead to a full audit — for example, if your explanation raises a new question, or if a pattern across several years' matching-program results suggests a broader issue. This isn't the norm, but it's a reason to answer review letters accurately and completely rather than treating them as a rubber-stamp exercise.
Frequently asked questions
Is a CRA review letter a bad sign?
Not usually. Most review letters are routine, automated checks tied to a specific credit or deduction, and many Ontarians receive one at some point without it reflecting any wrongdoing.
Can I ignore a review letter if I'm confident my claim is correct?
No. Even a correct claim needs to be supported with the requested documentation, or the CRA may simply deny or reduce it for lack of proof — regardless of whether the underlying claim was valid.
Do I need a lawyer for a review letter?
Usually not, for a single, narrow item. A lawyer becomes more useful once a matter escalates toward a full audit, involves significant amounts, or touches on questions of penalties or director's liability.
What happens if I miss the deadline on a CRA letter?
Missing a deadline on either a review or an audit letter typically leads to the CRA proceeding without your input — denying the claim in a review, or finalizing a reassessment based on available information in an audit. It's almost always better to request an extension than to let a deadline pass silently.
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