Reassessment

Two ways a reassessment starts

Some reassessments begin with you. After you receive a notice of assessment, you can ask the CRA to change an individual return to add a missing slip, claim a forgotten deduction or credit, or correct an amount. When the CRA accepts the change, it issues a notice of reassessment showing the new result.

The other route is a CRA-initiated reassessment. This can follow a CRA review of your return or of the records behind it. The notice should explain what changed, so read the explanation before reacting to the new balance or refund.

The normal reassessment period

For individuals, the CRA generally cannot reassess more than three years after the date of the original notice of assessment. For a corporation, the period depends on its status at the end of the tax year: three years if it was a Canadian-controlled private corporation and four years if it was not. The clock runs from the original notice, not from the filing date or the end of the tax year.

There are limits to that protection. The period can be extended in specific situations, such as certain dealings with non-arm’s-length non-residents. The CRA can reassess at any time if there was a misrepresentation because of neglect, carelessness, wilful default or fraud, or if a waiver was filed before the period ended. Separately, an individual can still ask for a reassessment beyond three years where it would produce a refund or reduce tax owing, and the CRA may agree under its relief provisions.

An illustrative example

Suppose, for illustration, a sole proprietor’s 2025 return receives its notice of assessment in May 2026. The normal period generally runs to May 2029. If an accountant finds in 2027 that a $2,000 expense was missed, a request to change the return falls well inside it. If the CRA reviewed the same return in 2028 and disagreed with a claim, it would also be inside the period, so the records behind that claim still matter.

What to do when a notice arrives

Compare the notice with the return you filed and with your records for that year. Note exactly which line changed and why. Some changes are simple corrections; others reflect a disagreement that needs supporting documents, and a formal dispute is a separate process with its own deadline, which you should confirm from the notice itself.

Keep every notice of assessment and reassessment with your filed returns, and keep supporting records for at least six years from the end of the last tax year they relate to. When a notice surprises you, send it to your accountant promptly instead of paying or ignoring it first.