Tax Law

Read the notice carefully to understand what it is asking for and note any response deadline, since these are often time-sensitive. Avoid ignoring it or assuming it will resolve itself, even if the notice seems routine. Gather any relevant documents referenced in the notice, such as prior returns or receipts, and consider having a lawyer or accountant review it, particularly if the notice involves a review, audit, or a proposed reassessment rather than a simple request for information.

A notice of assessment is the CRA's response after processing your tax return, confirming the amount of tax owed or refunded and any adjustments made to what you originally filed. It is a routine part of the tax filing process and does not necessarily indicate a problem. However, if the assessment differs significantly from what you expected or filed, it is worth reviewing the details closely, and reasonably promptly, since there are time limits for formally disputing an assessment you disagree with.

A review is typically a more limited process where the CRA asks for documentation supporting specific items on your return, such as a particular deduction or credit. A full audit is broader, examining your overall tax filings and financial records in more depth, and can cover multiple years. Both processes require a clear, organized response, but an audit generally involves more at stake and more complexity, which is why it is often worth having representation involved from an early stage.

Yes, there is a formal process for disputing a CRA assessment or decision if you believe it is incorrect, generally starting with a formal objection within a specific time limit. If the objection does not resolve the issue, there are further steps available, including potentially bringing the matter before a tax court. Because there are strict deadlines involved and the process requires supporting documentation and a clear legal basis, it is worth having a lawyer review your situation before proceeding.

Voluntary disclosure is a program that allows taxpayers to come forward and correct previously inaccurate or incomplete tax filings, in some cases before the CRA has already identified the issue. Depending on the circumstances, this can reduce certain penalties that might otherwise apply. Whether you qualify depends on specific conditions, including the timing and nature of the disclosure. If you believe a past filing was incomplete or inaccurate, it is worth discussing your situation with a lawyer before deciding how to proceed.

Generally, it is wise to keep copies of filed tax returns, receipts and records supporting any deductions or credits claimed, business records if applicable, and correspondence with the CRA, for several years after filing. Well-organized, complete records make responding to a review or audit far more straightforward if one arises. If you are unsure how long to keep specific records for your situation, it is worth asking, since requirements can vary depending on the type of income or business involved.

Accountants typically handle tax preparation, planning, and routine filings, while tax lawyers generally become involved when there is a dispute with the CRA, a legal question about how tax rules apply to your situation, or the potential for penalties or legal consequences. Many situations benefit from both perspectives working together. If you are already working with an accountant but the CRA matter has escalated beyond routine filing questions, it is a reasonable time to also involve a lawyer.

Timelines vary considerably depending on the complexity of the issue and which stage of the process is involved — a straightforward review may be resolved in weeks, while a formal objection or an appeal to a tax court can take considerably longer, sometimes many months or longer for more complex matters. We can give you a more realistic sense of timing once we understand the specific issue, the amounts involved, and which stage of the CRA process you are currently at.