Updated Checked by the Tax-Services.ca editorial team How we check
No CRA page we found gives a detailed list of audit triggers. The agency says it picks returns for review for four broad reasons: numbers that do not match third-party slips, the kinds of deductions or credits claimed, compliance history, and random selection. Anything more specific than that, such as exact income levels, is guesswork.
What does the CRA say about picking returns?
The agency’s own page on how returns are selected for review gives those four reasons and little else. It adds that picking works the same for paper and online returns, and that most reviews are done by computer screening rather than by a person reading your file. It also says it adjusts its focus every year based on what earlier reviews found.
So you’ll see lists online of “red flags” with confident percentages and dollar limits. None of them appear on a CRA page. If a site names an exact income level or a magic deduction ratio, ask where it got the number.
| Reason the CRA gives | What it means for you |
|---|---|
| Information doesn’t match third-party sources, such as T4 slips | Report every slip you’re sent, exactly |
| Types of deductions or credits claimed | Keep proof for anything you claim |
| Compliance history | File on time and correct mistakes yourself |
| Random selection | Nothing to fix, only records to have |
Is a review the same as an audit?
Not quite. A review often starts with a letter asking for proof of something on your return. The CRA says it may ask for more than official receipts, such as cancelled cheques or bank statements. A business audit is bigger. The CRA says its risk systems flag returns it considers high risk for non-compliance, and an officer then looks at information from several sources to decide whether to audit.
Being picked at random isn’t an accusation. And if a tax preparer did your return, the CRA says selection doesn’t reflect on the preparer either.
Does a big refund or a home office claim make you a target?
People ask this all the time, and the honest answer is that nobody outside the CRA knows. The agency lists claim types as one reason for selection, but it doesn’t say which ones, and it doesn’t publish thresholds. A large claim isn’t wrong. It just needs paper behind it, so the rule of thumb is to claim what’s yours and be able to prove every dollar.
What does an unreported slip cost?
Take the mismatch reason, the one the CRA names first. Suppose you earn $60,000 in Ontario and forget a slip for $2,400 of other income. The income tax calculator shows about $712 of extra tax, and that’s before any interest or penalty. We haven’t quoted penalty rates because we couldn’t confirm them on an official page.
The trap is that the CRA already has its copy of the slip. Your return is the only place the two can disagree. To check your own figures before filing, run them through the tax refund calculator and compare with your slips. Wait until every slip has arrived before you file, rather than filing from memory. If one is still missing, check My Account, where slips the CRA has received tend to appear, and then ask the issuer. A late slip is a nuisance, but a forgotten one is how a mismatch starts.
How do you prepare for a CRA audit letter?
Keep your records. The CRA says to keep income tax records, including receipts and documents that support your claims, for at least six years. For credits and deductions, the tax credits calculator is a useful reminder of what you actually claimed, so you know which papers to find first.
If you run a business, the CRA says an auditor will usually phone first. You’re allowed to end the call and wait for a confirmation letter before giving anything. Electronic records are preferred, and you can hand over documents at your premises, let the auditor borrow them (you get a detailed receipt), or send them in by mail or through an online service, but not by email.
Once you get the findings, you have 30 days to respond. If you disagree, you can talk to the auditor’s team leader and then file an objection. You have rights throughout, and the CRA points to the Taxpayer Bill of Rights.
Self-employed? The self-employed tax calculator shows the tax on your net income, so do it before you file, and your own numbers don’t surprise you when a letter arrives.
What mistakes make an audit worse?
Ignoring the letter. It has a deadline, and missing it can make a small question grow. Sending originals you can’t replace is another. Guessing at answers is a third, since a wrong answer is harder to fix than a late one.
Most people who get a letter did nothing wrong. They just can’t find the receipt, and a shoebox of paper isn’t a filing system. A folder per year, kept in the same place, fixes most of it.
Here’s a quick routine for every spring. Lay out each slip, tick it off against the income lines on your return, and then do the same for each deduction and its proof. It takes about an hour, and it covers the first two reasons on the CRA’s list.
Official pages on this topic: Canada Revenue Agency: What you should know about audits and Canada Revenue Agency: Business audits.
How far back can the CRA go?
For most people the normal reassessment period is three years from the mailing date of the original notice of assessment. The CRA can go further when there has been misrepresentation through neglect, carelessness, wilful default or fraud, when a return was never filed, or when you sign a waiver. That is why the six year rule for keeping records exists: it is longer than the normal period, so papers are still there if a question comes up.
The practical lesson is simple. If you filed the 2023 return and got your notice in spring 2024, the normal window for that year runs out in spring 2027. Filing for 2026 in spring 2027 starts a new three year window. Dates for the 2026 return are not published yet, so check the CRA's due dates page. Related guides on this site: what your notice of assessment says, how to check and change a filed return and dealing with the CRA.
What should you do now, before the 2026 return?
Three jobs fit into an evening and cut the risk of a mismatch. First, log in to your CRA account and note which slips it already shows. Second, start a folder for 2026 and drop each receipt in as it arrives. Third, list the claims you plan to make and write one line next to each saying where the proof is. Most 2026 slips arrive by the end of February 2027, so wait for the last one before you file.
Our sources
The selection reasons, record-keeping period and audit steps come from the CRA pages What you should know about audits and business audits, and the three year reassessment period from the CRA audit manual. All were checked in November 2026. The tax example uses our 2026 federal and Ontario tables. Nothing published explains how the CRA scores risk, so nobody can tell you your own odds.
Frequently asked questions
Does the CRA publish its audit triggers?
No detailed list that we could find. Its page names four broad reasons: mismatches with third-party slips, the types of deductions or credits claimed, compliance history and random selection. Lists of red flags with exact income levels or ratios are not on any CRA page, so ask where such a number came from.
Is a review the same as an audit?
No. A review usually starts with a letter asking for proof of specific claims, such as receipts or bank statements. A business audit is wider and looks at ledgers, invoices and bank records, and an officer decides whether to audit after looking at information from several sources. Neither is an accusation.
How long do I have to respond to audit findings?
The CRA says you have 30 days to respond to the findings of a business audit. If you disagree, you can speak to the auditor's team leader and then file an objection. Write the date down when the findings arrive, and keep copies of whatever you send back.
Can I send audit documents by email?
For a business audit, the CRA says you can deliver the documents, mail them or submit them through an online service, but not by email. An auditor may also borrow originals and give you a detailed receipt. Ask for the delivery options in writing before you send anything sensitive.
How far back can the CRA look?
The normal reassessment period for most individuals is three years from the mailing date of the original notice of assessment. It can be longer when there is misrepresentation, an unfiled year or a signed waiver. Keep records for six years either way, as the CRA advises.
- 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