How to Respond to a Notice of Reassessment
You are responsible for providing correct information to the Canada Revenue Agency (CRA) when you file your tax returns. When the CRA completes its review of your submitted tax filing, it will send you a Notice of Assessment.
However, the CRA can go back four years to look at – and possibly reassess – past returns. If the CRA suspects fraud, it can and will go back farther. This means that the CRA can go back and conduct an audit on your returns within this
four-year period (and possibly beyond). After this audit, the CRA will send you a Notice of Reassessment, which will replace the Notice of Assessment.
You will also receive a Notice of Reassessment if your return has been adjusted through the Beneficial Client Adjustment Initiative. Under this initiative, the CRA will compare the information that you provided on your return with the information submitted by third parties (such as your employer or bank).
If you have failed to report your income accurately on your tax return, your Notice of Reassessment will list the corrected numbers along with the taxes and applicable interest owing.
What Should You Do if you Receive a Notice of Reassessment
If you receive a Notice of Reassessment, you can choose to accept the reassessment and pay the amount listed as owning. Of course, depending on your situation, this could be very large amount. If you don’t have the funds available to pay the CRA in full right away, interest charges will continue to add up, making it even more expensive to pay off the debt. If you are in this situation, you’ll want to speak with tax professionals before you begin any negotiations with the CRA, including agreeing to a payment plan.
However, if you disagree with the reassessment, you have 90 days to follow a Notice of Objection. It is best that you file this objection with the support and advice of a trusted tax professional, as dealing with the CRA can be complicated and confusing. You’ll want to make sure that you do everything right.
When you file your objection, you will need to provide supporting documentation to prove that the numbers on the Notice of Reassessment are inaccurate.
Once the Notice of Objection is received, the CRA will review your case and it may attempt to negotiate an acceptable solution with you. If this happens, you will certainly want to have a trusted tax professional on your side. CRA negotiators are very tough and very experienced. The most successful negotiations are done with the assistance of professionals. If you are in this situation, please contact us today by calling 1-888-868-1400. Our team can help you navigate the situation and ensure your greatest chances of success.