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A Letter Arrived From the CRA. Here Is the Order to Do Things In.
Plan your expenses and deductions strategically each year
Timing is a lever. When you buy equipment, pay a bonus, or make an RRSP contribution changes what you can deduct and when — and the best moves are made before your year-end closes, not in the scramble afterward. Reviewing your position mid-year is what keeps those options open.
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Maintain accurate and organized financial records for easy reporting
Reconciled every month, your books are filing-ready and cheaper to prepare. Rebuilt in a hurry from a shoebox of receipts, they produce a number that's wrong often enough to matter — missed credits, personal expenses left in, transfers coded as revenue. Keep bank, credit-card, and HST records current as you go.
Talk to a tax professional for expert guidance
Software reports what happened; it won't tell you what to do about it. A specialist who knows your business structure can flag changes to your instalments, the small business deduction, and your salary-versus-dividend mix while there's still time to act — before the return is filed, not after.
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The point is simple: the earlier you look, the more you can change. A review done mid-year gives every decision two quarters to work — the same review in filing season is just a report on choices already made.
“A mid-year review isn't more paperwork. It's the chance to change your tax bill while you still can — deliberately, with the numbers in front of you.”
Use accounting and tax software to make management easier
The right tools cut the manual work — automatic bank feeds, digital receipts, and built-in GST/HST tracking. Paired with a monthly review, the numbers start driving decisions instead of just piling up. We set this up and keep it running as part of every engagement.
A CRA envelope gets the same reaction from almost everyone. Your stomach drops, and then you decide to deal with it later. Both halves of that are the problem.
The panic is usually misplaced. Most letters the CRA sends are routine, automated, and narrow. They ask for one document, or question one line of your return. They are not an audit, and they do not mean anyone has decided you did something wrong.
Dealing with it later is where the actual damage happens. Almost every CRA letter carries a deadline, and the consequence of missing it is rarely a conversation. It is usually a reassessment that removes whatever you could not support, calculated as though the claim was never valid.
So the first job is not to respond. It is to work out which letter you are holding.
Quick answer: What should I do if I receive a letter from the CRA? Identify the type before you do anything else, because the response differs. A processing review or request for information asks you to support something already claimed, and normally states its own deadline. A notice of reassessment is a decision that has already been made and starts a separate, shorter clock if you disagree with it. An audit letter is a different process again. Read the letter for what it actually asks and by when, gather only what was asked for, respond in writing through the channel it specifies, and keep a copy of everything you send. The two mistakes that turn a routine review into a real problem are missing the stated deadline, and sending more than was requested. Confirm deadlines and procedures at canada.ca, because they differ by letter type and by year.
Which Letter Is It?
The letter itself will say, usually in the first paragraph and again in the reference line. It is worth reading twice before reacting, because the common types have different stakes and different clocks.
- Processing or pre-assessment review. An automated check on one or two lines of a filed return. Very common, and not an accusation. The letter states its own deadline, commonly around 30 days.
- Request for information or documents. The CRA wants support for a specific claim: receipts, a T-slip, proof of an expense. The deadline is stated on the letter, and extensions can often be requested before it passes.
- Notice of reassessment. A decision already applied to your account. Your return has been changed and a balance may now be owing. A formal objection has its own separate deadline, and it is shorter than people expect.
- Audit or examination letter. A broader review of a period or of the business, usually with a named auditor as contact. The timetable is set by the auditor, but the scope is negotiable in a way a review is not.
- Arrears or collections notice. A balance is outstanding and collection has begun. Interest compounds daily and does not pause while you gather documents.
Confirm current deadlines, thresholds, and procedures at canada.ca before calculating or relying on any of them. They vary by letter type, by tax year, and occasionally by province.
The Order to Do Things In
- Read the letter for two things only. What is being asked, and by when. Everything else in the envelope is context. Write both on the front page.
- Put the deadline in your calendar right away. Before you gather a single document. The deadline is the one part of this you cannot get back, and most of the damage in CRA matters comes from a date slipping rather than from the question itself.
- Work out whether it is a request or a decision. A request asks you to support something. A decision has already changed your account and needs a different response, on a different clock. Confusing the two is the most expensive mistake available here.
- Gather exactly what was asked for. Not the surrounding file. A review of child care expenses wants child care receipts. Sending three years of bank statements raises questions nobody had asked.
- Respond in writing, through the channel the letter names. Usually the CRA account or the address on the letter. Keep a dated copy of everything you send and how you sent it.
- If you cannot meet the deadline, ask before it passes. Asking for more time in advance is routine. Asking after the date has gone is a different conversation entirely.
The Three Mistakes That Make It Worse
- Ignoring it. The CRA does not interpret silence as disagreement. It reassesses on the information it has, which means removing the claim you did not support. The letter stops being a question and becomes a balance.
- Over-answering. Sending everything you have, to look cooperative, widens what they look at. Reviews start out narrow on purpose. Answer the question that was asked.
- Answering on the phone and leaving no record. A call can be useful for clarifying what is wanted. It is not a substitute for a written response you can produce later. If it is not documented, it is difficult to rely on.
Five Signs You Should Not Handle This Alone
- The letter is a reassessment, not a review. A decision has been made. The path to change it is formal and time-limited.
- It covers more than one year. Multi-year correspondence usually means a pattern has been flagged rather than a single line queried.
- It concerns your corporation's shareholder loan or owner draws. These turn on classification and documentation, and the amounts are typically large relative to the business.
- You cannot produce the records that support the claim. The answer here is not to invent them. It is to work out what you can still reasonably support, which is a judgement call.
- The deadline is close and your books are behind. Two clocks at once. This is the combination that most often turns a routine letter into a real cost.
What It Costs to Get This Wrong
The direct cost is the claim itself. A denied deduction becomes taxable income, and tax is assessed on it as though the claim was never made.
On top of that sits interest, which compounds daily from the original due date rather than from the date of the letter. That is why a matter left for three months is not the same matter three months later.
The indirect cost is the one people miss. A review answered well from existing records closes and ends. A review answered badly, or not at all, tends to invite the next one. The position you are in when a request arrives is largely determined before it arrives.
How Count myAccount Handles This
- Count myAccount assigns your file to a specialist who has handled the specific letter type you received, so the first step is identification rather than guesswork.
- We put the deadline in the calendar the day it arrives and tell you plainly whether the letter is a request you can answer or a decision you would need to formally dispute.
- We assemble exactly what was asked for, from your records, and we tell you where the support is thin before the CRA does.
- We respond in writing on your behalf and keep the full correspondence record, so the next letter starts from a documented position rather than from memory.
- If your books are behind at the same time, we run the catch-up alongside the response rather than sequentially, because the deadline does not wait for the reconciliation.
- We own the process and the outcome. You get told what is happening and what it means, not forwarded a PDF.
Received something from the CRA and not sure what it is? Book a free consultation at countmyaccount.ca. Tell us the letter type, the date on it, and the tax year it refers to. We will tell you what it actually asks, what the deadline is, and what a clean response looks like.
Frequently Asked Questions
Does a letter from the CRA mean I am being audited?
Usually not. The majority of CRA correspondence is automated review or a request for supporting documents on a specific line of a filed return, and it carries no implication that anything is wrong. An audit is a distinct process, generally identified as such and assigned a named contact. The letter will tell you which it is, normally in the opening paragraph and in the reference line.
How long do I have to respond to a CRA review letter?
The letter states its own deadline, and around 30 days is common for processing reviews. Deadlines differ by letter type and by year, so read the date on your letter rather than relying on a general figure, and confirm at canada.ca. If you cannot meet it, request an extension before it passes; asking in advance is routine, asking afterward is not.
What happens if I ignore a CRA letter?
The CRA reassesses using the information it already holds, which in practice means removing the claim you did not support. The amount becomes taxable, and interest is charged from the original due date rather than from the date of the letter. Silence is not read as disagreement, and it does not preserve your position.
Can I dispute a notice of reassessment?
Yes, through a formal objection, but it runs on its own deadline which is separate from and shorter than most people assume, and it is calculated from the date on the notice. Because the rules differ between individuals and corporations, and the calculation can depend on your filing due date, confirm the exact deadline that applies to your notice at canada.ca or with your accountant before relying on any general figure.
Should I send everything I have, to be safe?
No. Reviews are deliberately narrow, and sending material that was not requested widens the scope and raises questions nobody had asked. Answer precisely what was asked, in writing, and keep a dated record of what you sent.
What if my books are behind and a CRA letter arrives?
Run both at once rather than in sequence, because the letter's deadline does not pause while you reconcile. Work out what the letter specifically needs and rebuild that part first, then carry on with the wider catch-up behind it. This combination, a live deadline plus books that are months behind, is the situation that most often converts a routine letter into a material cost.
