A tax audit is when the Canada Revenue Agency (CRA) examines your books and records to assess if you have paid all the taxes you owe. An audit is not the same as a review. But it may be triggered if the CRA is not satisfied with your response to a review.
The CRA can audit tax returns within 4 years of the date of the original notice of assessment. If the CRA suspects fraud, it can audit you at any time.
On this page you’ll find
If you’re audited
If you’re selected for an audit, it is in your best interest to:
- co-operate with the auditor,
- answer all questions respectfully, and
- provide any information and supporting documents requested on a timely basis.
You may also want to get advice from a tax professional, who can act as your representative.
Keep all your tax information and receipts for 6 years. If you’re audited, providing the CRA with the necessary supporting documents may minimize the impact of the audit.
4 tax filing tips
- File your tax return on time – Filing late can increase your chances of being audited.
- Report everything you are supposed to – Declare all of your income, especially if you are self-employed or are paid in cash. The CRA compares taxpayers in similar businesses to see if anything stands out. It also sometimes tests a certain group of taxpayers, such as people who earn most of their income in cash. If you fall into this category, and your return stands out, you may be audited.
- Get the math right – Inaccuracies may cause the CRA to flag your return. The easiest way to file an accurate return is to use tax preparation software.
- Beware of tax schemes – The CRA issues warnings about tax schemes, for example, buy-low donate-high charity schemes. You’re likely to be audited if you make this type of claim.
2 key points
- You can be audited up to 4 years after the CRA issues you a notice of assessment.
- If the CRA suspects fraud, it can audit you at any time.
Take action
4 tax filing tips:
- File your return on time
- Report everything you’re supposed to
- Get the math right
- Beware of tax schemes