The CRA may select your income tax for review for a number of reasons. It could be random; it could be due to inconsistency between what you reported is different from what your employers or banks provided to the CRA; it could be a significant amount of claims or deductions. Anyway, it is nothing unusual.
What should you do?
Usually CRA seeks to obtain additional information to ensure income, deduction, and credit amounts on income tax returns have been correctly reported.
- Read the letter carefully, noting the reference number, what documents required and the deadline to reply.
- Gather all documents. If you are missing back-up documents, please include an explanation letter.
- Quote the reference number in all your correspondence with the CRA.
- Submit the documents before the deadline. Submission can usually be done by fax, mail or online.
What if I don’t reply?
If you don’t reply on time or ignore their request, the CRA can make adjustments as they see fit based on the information available to them, which might leave you with unwanted fees.
What are the claims or deductions that may trigger review?
- Annual Union, Professional, or Like Dues.
- Moving Expenses.
- Support Payments made.
- Caregiver amount.
- Tuition fees.
- Transferring of Tuition, Education, and Textbook amounts.
- Medical Expenses.
- Interest on investments
- Allowable business investment loss
- Federal Foreign Tax Credit amount.
(Update July 1, 2018)