What actually happens during a CRA review? A step‑by‑step walkthrough
If you’ve ever received a letter from the CRA that says “We’re reviewing your return,” it probably didn’t feel great. But most of the time, a CRA review is not an audit, not an accusation of wrongdoing, and not the beginning of the end. It’s a routine part of how the CRA validates information.
Below is a step‑by‑step walkthrough of what typically happens, what the CRA is really asking for, and how to respond calmly and effectively.
Review vs. audit: Understanding the difference
CRA review: A review is usually a targeted check of specific items on your return. For example, medical expenses, employment expenses, tuition, charitable donations, or business expenses. The CRA wants to see proof that the amounts you claimed are accurate and eligible.
CRA audit: An audit is more in‑depth. It often involves a broader look at your income, expenses, books, and records over one or more years, sometimes including in‑person or virtual meetings.
Most people who say “I got audited” actually went through a processing review, not a full audit.
Step 1: The CRA selects your return
The first step happens behind the scenes: the CRA selects your return for review. This can happen for several reasons, for example:
Random selection: Your file is chosen as part of routine sampling.
Risk-based flags: Certain claims tend to be higher‑risk: large medical expenses, home office expenses, moving expenses, employment expenses (T2200), large donations, or new/different claims compared to prior years.
Mismatch with third‑party data: The CRA matches your return against slips (like T4s, T5s, T2202s) and other information it already has. If something doesn’t line up, that can trigger a review.
You usually won’t know which reason applied to you, and the letter seldom explains that. What matters is how you respond.
Step 2: You receive a CRA review letter
The next step is a letter (often through My Account or My Business Account, and sometimes mailed) that tells you:
Which tax year is being reviewed
Which items they’re looking at (e.g., medical expenses, childcare, moving, business expenses, rental expenses)
What documents they want from you
The deadline for responding (often around 30 days)
How to send the information (online upload, fax, or mail)
This is the point where many people panic. But the key is to read the letter carefully and break it down into a checklist.
Step 3: You gather supporting documents
This is where you turn your claims into proof. The CRA isn’t asking you to explain your life story; they want documentation that supports the numbers.
What you gather depends on what they’re reviewing:
Employment expenses (T777): T2200/T2200S signed by your employer, detailed receipts, mileage logs, home office calculations, and support for the workspace percentage.
Medical expenses: Receipts showing the patient name, provider, services/products, dates, and proof of payment. Sometimes prescriptions or referrals for specific services.
Childcare expenses: Receipts from daycare providers showing child name, dates, amounts, provider name/BN, and method of payment.
Tuition and education: T2202 slips, receipts from the institution, and confirmation of programs/courses if requested.
Donations: Official donation receipts from registered charities (not just bank statements).
Moving expenses: Receipts showing expenses claimed, employment letter, other supporting documentation of location of residence and reasons for moving.
Business or rental expenses: Invoices, receipts, contracts, mileage logs, bank/credit card statements as needed to support specific categories.
Two key principles:
Match documentation to the item reviewed. Don’t drown CRA in paper, target exactly what they asked for. Make it easy to follow.
Make it legible and organized. Clear scans, logical file names, and a simple summary can make a huge difference.
Step 4: You respond to the CRA
You now send your documentation back to the CRA. Typically, you have three options:
Online upload: Using CRA My Account or My Business Account, you can upload PDFs or images directly in response to the review letter. This is usually the fastest and cleanest route.
Fax: You can fax the documents, making sure you include the reference number and cover page.
Mail: You can mail copies (never originals) to the address on the letter. This is slower and slightly riskier for timing.
Best practices when responding:
Include the reference number from the letter on everything.
Attach a short cover letter or summary listing:
Which items are being reviewed
What documents are included
Any clarifications needed (e.g., split receipts, shared expenses, or proration)
Submit before the deadline. If you truly can’t meet it, you or your CPA can call the CRA to request an extension.
Step 5: The CRA reviews your documents
Once received, the CRA agent will review the information and determine whether:
Your claim is accepted as filed
Your claim is partially allowed (some amounts reduced)
Your claim is denied (no supporting documentation or not eligible under tax rules)
More information is needed
You might not hear anything for several weeks or even a few months, depending on their workload and the complexity of your file. The absence of news doesn’t necessarily mean anything bad; it just means your file is in line.
Step 6: You receive a notice of reassessment (or confirmation)
When the CRA finishes, they will usually issue one of these:
No change / confirmation: Your return stands as filed. You might just see a note in your account or a letter saying the review is complete.
Notice of reassessment: This document shows what they’ve changed, reduced claims, increased income, disallowed deductions, or adjustments to credits. It results in:
A balance owing (if they reduced your claims)
A smaller or larger refund
Or sometimes no change in the bottom line, but changes in specific lines
Read the reassessment carefully. Look specifically at:
Which line items changed
The explanation in the notes section
The financial impact (including interest)
Step 7: Deciding whether to accept or dispute the result
If you agree with the CRA’s adjustments, there’s nothing more to do other than pay any balance owing by the deadline to minimize interest.
If you disagree, you have options:
Call the CRA first: Sometimes, a quick call can clarify misunderstandings or identify missing documents. If something was overlooked, you may be able to submit additional information.
Provide additional documentation: If you genuinely forgot something or didn’t understand what they were asking for, you can send further support.
File a formal Notice of Objection: If you still disagree, you can file a Notice of Objection within the prescribed timelines (usually 90 days from the date of the Notice of Reassessment). At this stage, you’re asking an Appeals Officer to review the situation.
This is generally where working with a CPA is especially helpful. A structured, well‑argued objection has a much better chance than an emotional or vague response.
How to reduce the chances of a stressful CRA review
You can’t fully eliminate the possibility of a review, but you can make the process much less painful:
Keep documentation year‑round: Don’t wait until CRA asks. Save receipts, logs, and statements in a structured way.
Be consistent with prior years where appropriate: Large swings or new claims can invite questions; just be ready to support them.
Understand eligibility rules before you claim: Claiming everything “just in case” is a recipe for trouble.
Work with a CPA for more complex returns: Self‑prepared returns with employment expenses, business income, rentals, or large claims are far more likely to run into issues, from mistakes more than malice.
The bottom line
A CRA review letter feels personal, but it’s usually a routine control, not an accusation. The process boils down to: they ask, you show proof, they adjust (or not). If your claims are reasonable and backed by documentation, a review is more of an administrative burden than a crisis. It is important to note that if a taxpayer does not respond to a review or audit request, the CRA may reassess the return based on the information it has, which could result in denied claims or additional taxes owing.