CRA processing review

What it is, and what it is not

The CRA runs several review programs that check amounts, deductions and credits on returns. A pre-assessment review happens before a notice of assessment is issued. A processing review happens after. The request verification and matching programs are separate programs, which the CRA also describes as happening at other stages.

The CRA says that when it selects a return for review, it does not represent a tax audit. It first tries to verify your claim from information already on file. If it needs more, it contacts you or your authorized representative by phone or in writing. A review can still lead to a change in your assessed result, so take it seriously.

Why a return is selected

The CRA lists several reasons: information that does not match third-party sources such as T4 slips, the types of deductions or credits claimed, compliance history and random selection. Most returns are processed without manual review, but all are screened and may be reviewed later, which is one reason to keep your supporting records.

An illustrative example

Suppose a sole proprietor claims $3,000 of supplies on a return, receives a notice of assessment and a few weeks later gets a letter asking for support. These numbers are illustrative. The proprietor should read the letter for the reference number and the reply deadline, then send the invoices and proof of payment that match the claim. If a receipt is missing, the CRA says to include a written explanation or call the number on the letter.

How to respond and what to discuss with your accountant

Reply within the time in the letter, to the address given, quote the reference number and send all the documents requested. If you need more time, call the number at the bottom of the letter before the deadline. You or your authorized representative can also send scanned documents online through a CRA account. If a claim is changed and you have more documents, the CRA says it will accept new submissions and review the claim again.

Bring the letter, the return, the notice of assessment and your receipts to your accountant. Ask whether to authorize them to deal with the CRA, whether the claim is supportable, and whether the matter is a simple documentation issue or needs a formal objection.