How to Respond to a CRA Reassessment in Ontario

Opening a Notice of Reassessment from the Canada Revenue Agency is rarely good news. The CRA is telling you it has reviewed your return and believes you owe more tax than you originally paid — sometimes significantly more, plus interest. Knowing how to respond to a CRA reassessment promptly and strategically can mean the difference between resolving the issue at a fraction of the cost and losing your right to dispute it entirely.

This guide explains what a reassessment means, how to evaluate it, what your options are, and the strict deadlines you cannot afford to miss.

What Is a CRA Reassessment?

When you file a tax return, the CRA issues a Notice of Assessment — its initial calculation of your tax owing or refund. If the CRA later decides your return was wrong (through an audit, a data-matching exercise, or a review of your file), it can issue a Notice of Reassessment changing the amounts.

A reassessment might:

• Add income the CRA believes you failed to report
• Disallow deductions or credits you claimed
• Apply penalties for late filing, misrepresentation, or other issues
• Assess interest on the revised balance owing

The reassessment is not a final court judgment — it is the CRA's position, and you have the right to challenge it.

Step 1: Read the Notice Carefully

Don't panic. The first step is to understand exactly what the CRA changed and why.

Look for:

• Which tax year(s) are affected
• The specific adjustments made (the notice will list each one)
• Any penalties or gross negligence charges (these are more serious than a simple reassessment of tax owing)
• The balance owing and the date it becomes due
• The date of the reassessment — this starts your objection deadline clock

Keep the original notice in a safe place. You will need it if you decide to object.

Step 2: Evaluate Whether the CRA Is Right

Before deciding how to respond, honestly assess whether the reassessment is:

A) Correct but painful: Maybe you genuinely made an error or claimed something you weren't entitled to. In that case, the path forward is usually to pay and, if appropriate, explore penalty relief or a payment arrangement.

B) Partly right: The CRA may have disallowed a legitimate deduction because you didn't provide adequate documentation during the audit. There may be room to negotiate or provide the missing evidence through the objection process.

C) Wrong: The CRA misapplied the law, made a factual error, or reassessed something outside the permissible reassessment period. You should object.

Getting professional help at this stage — from a tax accountant or a tax lawyer — pays off. They can spot errors in the CRA's reasoning that a non-specialist would miss.

Step 3: Know Your Deadline to Object

This is the most critical point in this article: the deadline to file a Notice of Objection is strict and, in most cases, non-negotiable.

As of writing, the general rule is that you must file a Notice of Objection within 90 days of the date printed on the Notice of Reassessment — or within one year of the tax-return filing deadline for that year, whichever is later. Verify this deadline immediately with the CRA or a tax professional, as missing it can permanently cost you the right to dispute the reassessment.

If you have missed the objection deadline, there is a separate process to request an extension, but it is not guaranteed. Don't let the deadline pass while you deliberate.

Step 4: Decide Whether to Pay While You Dispute

You can object to a reassessment and still owe money in the meantime. The CRA expects payment of the balance even while your objection is under review — and interest continues to run on any unpaid amount.

Options:

• Pay the full amount now to stop interest, then get a refund if you win the objection.
• Pay the amount you agree with (if you agree with part of the reassessment) and dispute the rest.
• Request a payment arrangement if you can't pay (see our article on what to do if you can't pay your tax bill).
• Apply for a collections hold while the objection is active — in many cases the CRA will not actively collect disputed amounts while an objection is properly on file, but this is not automatic. Ask your representative to confirm.

Step 5: File a Notice of Objection (If Disputing)

If you believe the reassessment is wrong, the formal next step is filing a Notice of Objection with the CRA's Appeals Division. This is a separate document from your tax return — it explains what you dispute and why.

Your objection should:

• Identify the tax year and the specific items you are challenging
• State the facts as you understand them
• Explain why the CRA's position is wrong (legally or factually)
• Attach supporting documents

A well-drafted objection is not a complaint letter. It is a legal submission. We recommend getting professional help to write it — sloppy objections can fail even when the taxpayer is right on the merits.

Frequently asked questions