Correcting Mistakes on Tax Returns

Filing your income tax returns can be complicated. There is a lot of different financial data and there are various ways to input the data. With all of these numbers and classes and details, it’s easy to make a mistake.

Many people worry when they make a mistake on their tax returns. They fear that the Canada Revenue Agency (CRA) will notice the error and immediately audit them or charge them with a huge tax bill. The good news is that, for many simple errors and mistakes, this isn’t the case.

If you forget to add information from a certain form, classify an expense incorrectly, or simply make an error entering numbers or doing math, there are ways to make the correction.

First you will need to wait until you receive your Notice of Assessment. You cannot change your tax return before receiving this assessment. Once received, you can make a change to your return by:

  • Using the “Change My Return” section on the CRA MyAccount page, or
  • Sending a completed “Adjustment Request” to your tax centre, or
  • Sending a signed letter to the CRA asking to adjust your return

If you are sending in a signed letter, you’ll need to make sure to include copies of all supporting documents relating to the change.

Once the CRA receives and reviews your request, it will send you a Notice of Reassessment indicating the changes made to your return or an explanation of why it did not accept the changes. You can object to the CRA’s determination by filing a Notice of Objection. If you plan to do this, it is best to contact a professional.

The Voluntary Disclosure Program

In addition to being able to make simple changes on your return, the CRA also has a program in place for adjusting prior year returns or filing a prior year return that was not filed when it should have been. It’s called the Voluntary Disclosure Program (VDP). This program is open to all Canadians. However, to file under the program:

  • Your disclosure must be voluntary (meaning you need to use the VDP before the CRA contacts you about your tax situation).
  • Your disclosure must be complete, so you can’t leave anything out
  • The information must be more than a year old
  • A penalty must apply, so the program is only open to those who face penalties or tax charges

As you can see, the program is designed for situations where a person may not have claimed their income correctly on an old return (for example) or for people who did not file when they were supposed to. If you forgot to list an expense or the information from a form on your most recent return, the VDP is likely not for you.

If you feel as though you may be in a situation where you could benefit from using the Voluntary Disclosure Program, or if you have made tax errors in the past and are not sure what to do, please contact us today. We can help you understand your options and assist you in the process of filing