Discovering that your tax return is under review—especially after you have already spent the refund you were expecting—can be stressful. Still, tax professionals emphasize that a review is often routine and usually less serious than many taxpayers fear.
According to the Canada Revenue Agency (CRA), it issues review letters to roughly three million taxpayers each year. Most reviews are intended to verify benefits and credits claimed on a return rather than to signal fraud or a full audit.
“A lot of these reviews are automatically generated based on either chance or particular items reported on your tax return,” said Sean Grant-Young, national tax director at Baker Tilly Canada. He explains that unusual or newly claimed items are more likely to draw the CRA’s attention.
Examples that commonly trigger review letters include moving expenses claimed for the first time, unusually large interest deductions, or sizeable medical expense claims. These items aren’t inherently problematic, but they can prompt the CRA to ask for documentation to confirm eligibility.
Inconsistencies and past errors that trigger a review
While many selections are random, the CRA also targets returns with inconsistencies. Charles Drouin, a spokesperson for the CRA, notes that self-employed people and gig-economy workers are statistically more likely to make reporting mistakes, which can increase the chance of a review. Taxpayers who have a history of adjustments or errors are also more likely to be flagged.
Receiving a review letter understandably raises anxiety. Grant-Young acknowledges the concern: “People get very worried when they receive requests from the CRA.” However, if claims are legitimate and properly documented, most reviews are straightforward and resolve without serious consequences.
It’s important to distinguish a review from an audit. A review typically involves the CRA asking for supporting documents—receipts, bills, or slips—to verify specific credits or deductions. An audit, by contrast, is a more comprehensive examination of your financial records.
How to respond to a CRA review letter
Read the review letter carefully and collect the documentation the CRA requests. This may include receipts, T-slips, invoices, or any other proof that directly supports the amounts claimed on your return. Organizing and presenting the information clearly speeds up the review and reduces the risk of misinterpretation.
Grant-Young recommends assembling a concise, well-ordered submission. If you are asked to verify medical expenses, for example, compile all related bills and prepare a single summary page that reconciles the total with the amount reported on your tax return. If your package is lengthy, include a cover summary so CRA staff can quickly see how the documents relate to the claimed amounts.
These supporting documents serve as backup because modern online tax filing systems no longer transmit all original paperwork to the CRA. Instead, taxpayers retain supporting records and provide them on request.
Respond to CRA requests on time
Although many reviews are routine, they should not be ignored. If you fail to provide requested documentation or cannot substantiate claimed deductions, the CRA can reassess your return. A reassessment can result in owing additional taxes or having to repay part or all of your refund, potentially with interest.
Timely responses are crucial. The CRA’s standard timeframe is 30 days to submit supporting documents, but the agency will consider reasonable requests for extensions if you need more time. Contact the CRA promptly if an extension is required to avoid missing the deadline.
Tips to reduce the chance of a CRA tax review
While some reviews are unavoidable, you can lower the likelihood of selection by ensuring accuracy and consistency on your return. Double-check that figures match your supporting documents—such as T4 slips, receipts and invoices—file on time, and claim only eligible deductions and credits. Organized record-keeping makes it easier to respond quickly if the CRA requests verification.
Grant-Young sums it up: if you receive a review notice, address it promptly and provide clear, well-organized support for your claims. That approach typically resolves reviews quickly and minimizes any further complications.
Read more about taxes:
- Tax due dates, credits and more: Your income tax return guide
- How to save on your taxes with automobile logs
- Rental income and taxes: What’s new for Canadian property owners in 2025
- Canadian expat tax guide: If I work abroad, where do I pay taxes?