CRA Waiver Form T2029: Extending the Reassessment Period in Canada

An auditor has asked you to sign a waiver, and you are not sure what you would be giving up. The form is often called Form T2029, and it deals with how long the CRA has to reassess a return you have already filed.

This article explains the time limit the waiver changes, what a waiver does and does not cover, how to think about signing, and how to revoke one. It is general information, and a lawyer or accountant can review the actual wording put in front of you.

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

The normal reassessment period

For individuals, trusts other than mutual fund trusts, and Canadian-controlled private corporations, the normal reassessment period ends three years after the earlier of the date of the original notice of assessment and the date of the original notification that no tax is payable. Mutual fund trusts and corporations other than Canadian-controlled private corporations have a four-year normal reassessment period.

Once that period ends, tax, interest or penalties cannot be assessed unless a listed exception applies, such as misrepresentation or fraud, a valid waiver, an extended period for specified items, or a taxpayer relief request.

What a waiver does

A valid waiver on Form T2029 filed within the normal reassessment period lets the CRA reassess later, but only for the matters the waiver specifies. It does not reopen everything on the return. A reassessment under a waiver is allowed only to the extent it can reasonably be regarded as relating to the matter that triggered the exception.

A waiver limits the Minister's power to reassess to the matters specified in it or reasonably related to them. A waiver included in the return when it is originally filed is not valid.

The normal period is also extended for items listed in s. 152(6), such as certain loss and investment tax credit carrybacks, and a waiver of that extended period may also be filed.

Should you sign?

There is no single right answer, because it depends on your file. Signing usually keeps the audit open past the deadline, which may let the auditor finish work that would otherwise run out of time. Refusing may mean the CRA moves quickly on the items it has, and without a waiver the CRA still has other routes in cases of misrepresentation or fraud, where there is no fixed time limit.

If you do sign, scope matters. The CRA's own manual says a waiver should be as specific as possible, and a waiver naming only the company and year is not in the taxpayer's favour. The CRA will not request a blanket waiver in advance of an audit or one solely to extend audit time.

• Ask which issues the waiver is meant to cover and why.
• Ask that the form name those issues rather than the whole year.
• Check the date the form is signed and filed against your normal reassessment period.
• Have a lawyer or accountant read it before you sign.

Revoking a waiver

A waiver can be revoked using Form T652 under s. 152(4.1). The revocation takes effect six months after the notice is filed and cannot be rescinded once filed. After that, the Minister cannot assess under the waiver.

Because of that six-month delay, revoking does not stop the CRA from reassessing the matters covered during that time. It is a step to plan, not a quick exit.

What to do next

• Find the date of your original notice of assessment and work out which period applies to you.
• Get the proposed waiver in writing and note exactly which matters it names.
• Gather the records for those matters, since you generally must keep books and records for a minimum of six years.
• Speak with a lawyer or accountant before signing or filing a revocation.
• If you disagree with a later reassessment, a notice of objection has its own deadline, so note it as soon as a notice arrives.

Frequently asked questions