The CRA conducts reviews on personal tax returns under four programs:
- Pre-assessment review: The CRA will request information to support an individual’s personal tax return prior to issuing a notice of assessment. These typically occur between February and July of the following tax year, shortly after the return has been filed.
- Post-assessment (processing) review: After the CRA has issued a notice of assessment, and in many cases issued a refund, it may conduct a post-assessment review to verify the information filed in the original return. Post-assessment reviews typically take place between August and December of the following tax year.
- Matching program: This program identifies variances between the information that has been filed by the taxpayer and the T slips that have been provided by the various employers, companies, partnerships, trusts, investment brokers, and banks. Requests under the matching program are issued after a notice of assessment and in many cases after a refund has been issued.
- Special assessment programs: These reviews take place before or after a notice of assessment has been issued. These programs conduct a more in-depth review of the income tax returns to identify and gather information or trends and situations in areas of non-compliance that may represent a risk to the self-assessment system. Examples of these programs include reviews of tips for servers or hairdressers in a particular geographic location, or a review of construction industry self-employment earnings.
Taxpayer Bill of Rights
The Taxpayer Bill of Rights describes and defines 16 rights and builds upon the CRA’s corporate values of professionalism, respect, integrity, and cooperation. It describes the treatment you are entitled to when you deal with the CRA. The Taxpayer Bill of Rights also sets out the CRA Commitment to Small Business to ensure their interactions with the CRA are conducted as efficiently and effectively as possible. Learn more about the Taxpayer Bill of Rights.
Voluntary Disclosure Program
The Voluntary Disclosures Program (VDP) gives you a second chance to correct a tax return you previously filed, or to file a return that you should have filed. If you file a VDP application and the CRA accepts it, you will have to pay the taxes owing, plus interest in part or in full. However, you are eligible for relief from prosecution and, in some cases, from penalties that you would otherwise be required to pay.
You can apply to the VDP to correct errors or omissions in your income tax filings through two streams, depending on the type of disclosure you want to make. The income tax stream covers all disclosures related to the Income Tax Act. The GST/HST stream covers all disclosures related to the goods and services tax / harmonized sales tax, excise tax, excise duty, the softwood lumber products export charge, and the air travellers security charge. The CRA and your advisor can help you determine which stream is appropriate for your disclosure.
If you have already received a request to file a tax return, or if the CRA has already sent you notice that they intend to review a particular period, you are likely not eligible for relief under the Voluntary Disclosure Program.