CRA Audit and Information Request: What to Expect and How to Respond

A CRA audit and information request can start as a short letter asking for receipts or as a formal legal demand, and the right response depends on which one you hold. The Canada Revenue Agency checks returns through reviews, which are not audits, and through audits, where it examines books and records. This guide explains the difference, the powers the CRA has to ask for information, how to respond in a way that protects your rights, and what to watch for before you sign anything.

What is the difference between a review, an audit and a requirement?

The CRA says returns can be selected for review because of a mismatch with third-party information such as T4 slips, the types of deductions or credits claimed, compliance history, or random selection. Selection is the same for paper and online filing. Keep income tax records, including receipts, for at least six years in case your return is selected.

How to respond to a CRA review letter

1. Find the reference number. Include the number printed at the upper right corner of the letter on everything you send.
2. Check authenticity. The CRA contacts people by phone, automated message, letter or email, never by text except for multi-factor codes. Read our scam alert guide if anything seems wrong.
3. Respond within the time frame in the letter. The CRA page gives no fixed number of days; your letter controls. If you need more time, contact the CRA right away using the number on the letter.
4. Send what applies. Send all receipts and documents requested that apply to your situation. You or your authorized representative may send scanned documents online through your CRA account.
5. Explain gaps. If you do not have a receipt or document, include a written explanation; the CRA says it will help you find an alternative.
6. Keep proof. Save upload confirmations and copies.
7. Resubmit if the claim was changed. The CRA says it accepts new submissions and reviews your claim again for a possible adjustment.

What powers apply to a CRA audit and information request?

An audit is an examination of your books and records. In audits the CRA has two main tools. An informal request, which can be verbal or written, falls under its inspection powers; unanswered verbal requests should be followed up in writing. A formal requirement is a legal document that requires you to provide information or documents, and it can be enforced through a compliance order. For information held outside Canada, the CRA can issue a foreign-based requirement; if you substantially fail to comply, you may be unable to introduce those documents in court later, although the CRA cannot seek a compliance order for that type of requirement.

The CRA says officials will give a reasonable time to comply and will try to accommodate reasonable extension requests. Taxpayers are expected to cooperate with reasonable requests, and officials are told to keep requests reasonable and avoid voluminous or duplicative material. Transfer pricing documentation under the Income Tax Act must be provided within three months of a written request, which matters to owners of Canadian companies trading with related non-residents.

What should you know before signing an audit agreement or waiver?

At the end of an audit the auditor proposes adjustments. A taxpayer, or authorized representative, may sign an audit agreement with a waiver of the right to object to and appeal specified issues. The CRA guidelines say you must be told:

• the method of assessment for each issue and the years involved
• that your rights to object and appeal end once the waiver is signed
• that you have the right to seek independent legal advice
• the financial impact of each issue, excluding interest
• that the agreement does not set a precedent and can be treated as invalid if significant new information emerges

The guidelines also state that the auditor must avoid pressure, and that waivers do not extend treaty time limits or limit your access to the mutual agreement procedure for cross-border disputes. If you do not sign, the CRA can reassess, and you keep the right to object. See CRA objections and appeals and notices of reassessment.

Which rights apply?

The Taxpayer Bill of Rights lists 16 rights. In an audit, expect professional, courteous and fair treatment, confidentiality, and complete, accurate, clear and timely information. You also have the right to choose a person to represent you (Right 15), though you remain legally responsible for your affairs; see authorized representatives by country. You can ask for a formal review and appeal, and you can ask for relief from penalties and interest for the previous 10 calendar years. If a service problem is not resolved by the CRA's own complaint process, the Office of the Taxpayers' Ombudsperson reviews service-related complaints.

How do other countries compare?

Foreign property and affiliate forms such as the T1135 often feature in cross-border reviews; see our T1135 guide and the record-keeping rules by country.

A worked example

Anjali, a freelance consultant in Calgary with US and Indian clients, receives a CRA review letter in September asking for receipts for $9,000 of home office and vehicle expenses on her 2025 return. She notes the reference number, uploads scans through her CRA account, and explains that two fuel receipts are missing, offering card statements instead. A few months later the CRA opens an audit of 2024 and asks for contracts with her US client. Her Canadian CPA responds in writing and reviews the proposed adjustments before she signs anything. Because the extra income would also change her US foreign tax credit calculation, our firm updates her US return. The amounts are hypothetical.

Mistakes to avoid

• Ignoring a review letter because it is not an audit.
• Sending originals or answering only by phone.
• Signing a waiver on the spot without advice.
• Missing a formal requirement date; these are enforceable.
• Forgetting the U.S. impact of Canadian adjustments.

How we can help

We do not represent clients before the CRA. Your Canadian CPA or tax lawyer responds to reviews and audits. From our Aurora, Illinois area base, we handle the U.S. side: we assess whether a Canadian adjustment changes your US return, foreign tax credit or reporting, and we coordinate with your Canadian professional so the filings agree. We cannot promise any outcome. See cross-border tax. Browse the notices hub for every guide in this series.

Frequently asked questions

General information only. It is not tax, legal, accounting or immigration advice for your situation, and rules change; confirm the current rules with the official source or a licensed professional in the relevant country.