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To prepare for a CRA tax audit, keep every receipt and record behind your return for at least six years, and be able to find any of them within a day. That single habit does more than any trick. Most people who get a letter from the CRA aren’t being audited anyway. They’re being reviewed, which is a lighter check, and the same paperwork answers both.
Is it a review or an audit?
The CRA says outright that a review isn’t an audit. In a review it asks you to back up something specific on the return, like a deduction or a credit. It may write to you or call.
An audit goes wider. An auditor contacts you by mail or phone, sets a time to meet at your home, business or your representative’s office, and looks at invoices, ledgers, bank statements, personal records and what the CRA already holds on you.
| What | Review | Audit |
|---|---|---|
| Scope | Specific claims | Records, business or personal |
| Contact | Letter or call | Mail or phone, then a meeting |
| Possible results | Letter, or a notice of assessment or reassessment | No change, tax owing or a refund |
Either way, the first step is the same: read what you’ve been sent, note the date on it and the date it asks you to reply by, and put that date on your calendar before you do anything else.
Why does the CRA pick a return?
The CRA gives four reasons. Figures that don’t match slips it received from others, such as a T4, come first. Then the type of deduction or credit, your past record with the CRA, and pure chance. Every return goes through computer screening first, so a match problem is often flagged before a person looks at it.
There’s a comforting side to that. Honest, well documented claims rarely need a fight. There’s an uncomfortable side too, since a big claim with no paper behind it is the one that stalls.
What should your file contain?
Keep your copy of the return and each notice of assessment. Add the slips, the receipts, cancelled cheques and bank statements. The CRA says official receipts alone may not be enough, so it can ask for proof of payment as well.
How long? At least six years. The CRA’s guide, Keeping Records (RC188), counts from the end of the last tax year the records relate to. We count from the day the return is filed instead, because that never gives a date that’s too early. Filed in April 2026, then keep it all until at least April 2032.
Sort it by return year and by claim: one folder for medical, one for donations, one for business costs. When a letter asks about one line, you’ll answer in an hour, not a weekend.
What if you can’t find a receipt?
It happens to everyone. Before you write the claim off, look for the next best proof. A bank or card statement shows that you paid, and many sellers can reissue an invoice if you ask. Email the seller today, not the week the CRA’s deadline falls.
If nothing turns up, say so plainly in your reply and offer whatever you do have. An honest “I can’t find this one” with a statement attached is a far better look than a reconstructed receipt, and a made-up one is a different and much bigger problem.
What does a failed claim cost?
Suppose you freelance in Ontario and report $45,000 of net business income. The self-employed tax calculator gives $10,060.99 in income tax and CPP. If the CRA disallows $3,000 of expenses you can’t back up, net income becomes $48,000 and the total is $10,921.48. That’s $860.49 more, before any interest, and we haven’t confirmed the penalty rules, so read your notice for those.
Want to see it for a salaried year? Put your figures into the income tax calculator, then add or remove the disputed claim. The tax credits calculator does the same for credits, and shows how much each is worth to you.
How should you respond to the CRA?
Reply, and do it soon. The CRA asks that you send all the information requested as quickly as you can. Read the letter twice, note the date, and send only what it asks for, with copies rather than originals. Keep a copy of everything you send, and write down the date and how you sent it.
If you get a proposed reassessment after an audit, you have 30 days to respond. Miss it and you lose the chance to argue before the change is made. And if the answer still looks wrong, the Taxpayer Bill of Rights lists 16 protections, including the right to appeal and to complain. Your notice explains how to object and by when, so follow its dates exactly.
What mistakes make audits worse?
Ignoring the letter is the big one. The next is sending a shoebox of paper with no order. Then there’s guessing: if you can’t find a receipt, say so, and offer other proof, like a bank statement. Making one up isn’t an option.
If self-employed, keep instalments in mind too. The tax instalments calculator shows what you’d owe during the year, and paying on time removes one thing an auditor can raise.
Where the numbers come from
The review and audit descriptions, the six year period, the 30 day response time and the Taxpayer Bill of Rights come from the Canada Revenue Agency‘s pages, read in September 2026. The tax examples use our 2026 Ontario calculators. This is an independent guide, separate from any government body.
Frequently asked questions
Is a CRA review the same as an audit?
No. The CRA says a review is not an audit. It usually asks you to support specific claims, while an audit examines your records more broadly.
How long should I keep my tax records?
At least six years. The CRA may also want proof of payment, such as cancelled cheques or bank statements on top of receipts.
Why did the CRA select my return?
Reasons include figures that don't match third party slips, the type of claim, your past record, or random selection.
How long do I have to answer a reassessment proposal?
The CRA's audit guide says 30 days.
What can I do if I disagree?
You can appeal through the CRA's dispute process. Your notice says how and by when.
- Dealing with the CRA: letters, audits and payments
Dealing with the CRA: what to do when a letter arrives, how a review differs from an audit, how My Account helps, and what to do if you can't pay