What to do with a review letter from CRA?

The answer to this question is not as stressful as some people think.  The Canada Revenue Agency (CRA) is simply asking for confirmation of information.  It is best to read the letter to determine if it’s an audit or simply a review.  The audit will request information and an appointment to review your information while the review is a request to supply them with the supporting documents for your deduction or income slips.  It is highly recommended to seek out an accountant rather than a tax preparer to answer the audit letter.  The tax preparer or you can answer the letter for the review.

CRA does only seven types of reviews; Pre-assessment, Processing, Request Verification, Refund Examination, Supplementary Examination, Matching, and Special Assessments.  Even though they appear to be many, they all have the same thing in common; they want confirmation of information.  In general, we receive the review letters and answer them without the client’s knowledge except the special assessments, where the clients receive those directly.  We advise our clients to come in and we will answer the review together.

You are probably wondering how tax returns are selected for review.  As per the CRA website, there are several reasons for a review such as the return does not match slips provided by third-party sources, the types of deductions or credits claimed, your compliance history, random selection, and more.

The best approach to answering these letters is to read them carefully, get a full understanding of what they are asking for, get copies of the requested supporting documents, and respond in a  timely manner, don’t delay.  There is nothing to fear as long as you prepared your tax returns honestly.  Keep your returns for seven years in case of a review, including all receipts, bank,statements, cancelled cheques, and any other documents that support your claim.