A CRA letter does not automatically mean an audit or that your return is wrong. It does mean that the request, deadline and evidence deserve careful attention.
The most useful first step is not to write a long explanation. It is to understand exactly what is being reviewed and build a file that lets the documents tell a clear story.
1. Verify the request
Read the full letter and record:
- the tax year and taxpayer or business account;
- the line, credit, deduction or reporting item under review;
- the documents requested;
- the response deadline and accepted submission method;
- the CRA contact information and reference number.
Compare the notice with the correspondence shown in your CRA account. If authenticity is uncertain, contact CRA using a published number—not a phone number or link from an unexpected message.
2. Reconstruct the reported amount
Start with the filed return and the schedule or working paper behind the number. Create a simple reconciliation:
- amount reported;
- transactions included;
- supporting document for each transaction;
- any allocation or calculation used;
- total that ties back to the return.
This often reveals whether the issue is a missing slip, a duplicate, a classification question or insufficient support.
3. Match evidence to the request
CRA says supporting records may include more than official receipts. Depending on the item, evidence could include invoices, proof of payment, contracts, mileage logs, statements, correspondence or documents showing purpose and eligibility.
Name files consistently and create an index. If one document supports several transactions, show the relationship. Do not alter original records. Preserve a copy of exactly what you submit.
More documents are not always better. Provide what was requested and what is needed to explain the amount. Unrelated information can create confusion or disclose more than necessary.
4. Separate facts from interpretation
Use a short cover note to identify the taxpayer, reference number, tax year, item under review and enclosed documents. State facts plainly. If a position depends on a legal or accounting interpretation, have a qualified professional review it before responding.
Avoid guessing, backdating or creating a document that is presented as contemporaneous when it is not. If evidence is unavailable, explain the gap honestly and ask your adviser what alternative support may be appropriate.
5. Control the deadline
Do not assume every CRA request uses the same response period. Use the date on the letter. If you cannot respond in time, contact the CRA officer or program area promptly and document the conversation. An extension is not automatic.
Keep a log of calls, dates, names, confirmation numbers, uploads and mailed items. Confirm that an online submission was received.
6. Know when to obtain help
Professional review is especially important when the amount is material, the facts are complex, records are incomplete, multiple years are involved, penalties are possible or the request could affect another filing position.
A consultant can help organize the issue and prepare questions. Legal conclusions, formal objections and specialized tax positions should go to the appropriately qualified professional.
Build readiness before a letter arrives
CRA generally requires tax records to be kept for at least six years, with some exceptions requiring longer retention. Maintain records that show not only the amount but also the business purpose, calculation and payment trail. Keep filed returns, notices of assessment and correspondence together.
A review-ready file is not about producing a perfect binder. It is about making each reported amount traceable to credible evidence.
Continue exploring
Official references
- CRA: how long to keep income-tax records
- CRA: keeping business records
- CRA: protect yourself against scams
This article is educational and does not replace representation or advice from a qualified tax, accounting or legal professional.