Updated Checked by the Tax-Services.ca editorial team How we check
A CRA audit notice is a letter or call that says the CRA wants to look closely at your books and records. Don’t panic, and don’t ignore it, because the dates in the letter start a clock that you’ll want to be on the right side of. The CRA says an auditor usually contacts you by mail or phone, or both, and tells you the date, time and place. You then have to hand over records and answer questions.
Is it an audit or just a review?
People use the two words as if they mean one thing. They don’t. The CRA says that when it selects your return for review, that doesn’t mean a tax audit. A review is usually a request for a receipt or a slip, often before or just after your return is assessed.
The CRA lists eight review programs on its site. Four examples are the pre-assessment review, the processing review, the matching program and the refund examination. During a review it may ask for documents.
| Review | Audit | |
|---|---|---|
| What it looks at | Income, deductions and credits on one return | Your books, records and whether you follow the tax law |
| How you hear | A request for documents | Mail or phone, with a date, time and place |
| Where it happens | Not stated on the pages we read | Often at your home, business or your representative’s office |
No fixed response deadline for reviews turned up on the CRA pages we read. The letter itself will give you one, so read it the day it arrives.
What should you do in the first week?
Read the whole notice. Find what it covers, which years and which items. Then gather records for exactly those things.
The CRA says you must provide all relevant records, paper and electronic, and give complete and timely explanations. It also says you need to keep records for at least six years. If you can’t find a receipt, say so early and ask the bank or supplier for a copy.
You can name a representative, such as an accountant, through form AUT-01. That’s worth doing when the audit covers a business, several years or a large amount of money. For a simple review of one slip, you’ll probably manage alone.
Keep a log of every call and every document you send. It’s dull work, and it’s the thing you’ll be glad you did.
Which records should you pull together?
It depends on what the letter names, but for most small businesses and self-employed people the same few items come up.
- Bank and credit card statements for the years in question.
- Sales invoices and the receipts behind every expense you claimed.
- Your ledger or accounting file, exported if it’s electronic.
- Contracts, leases and loan papers that explain large items.
Put each year in its own folder and label what each page is. Then if the auditor asks about a $3,000 expense, you can hand it over in a minute, not a week.
How should you handle the calls?
Politely, and in writing where you can. Write down the auditor’s name, the date and what they asked for. If you’re asked something you don’t know, say you’ll check and reply later. A guess on the phone can turn into a problem on paper.
If the auditor wants to visit, ask what they’d like to see so you can have it ready. And if you have a representative, let the auditor know who to speak to.
What does an audit cost if they disagree with you?
That depends on the adjustment. Say the CRA disallows $3,000 of expenses for an Ontario resident with $80,000 of taxable income. We ran this in the same maths as our income tax calculator. The extra income tax comes to about $889. That doesn’t include interest or any penalty, because how the CRA works those out wasn’t confirmed here.
Want to test your own numbers? Try the marginal tax rate calculator for the cost of each extra dollar, and the tax refund calculator to see how an expense changes your result. For a self-employed person, the self-employed tax calculator is closer to the truth.
What happens when the audit ends?
The CRA sends a proposal when it finds something to change. You get 30 days to respond. If you disagree, you can ask the auditor’s team leader to review the matter, and you keep the right to appeal a reassessment. A final letter says whether nothing changed, you owe more, or you’re due a refund.
You will have 30 days to agree or disagree with the proposal.
What you should know about audits (RC4188), canada.ca
Don’t sign off on a figure you don’t understand. Ask how the auditor got it.
Mistakes that make it worse
The first is silence. A missed letter doesn’t go away, and you lose time you could have used to find records. The second is handing over a pile of unsorted papers with no explanation. Label what each page is for.
The third is fixing your return on the side while the audit runs without telling anyone. How the CRA treats that wasn’t confirmed here, so raise it with the auditor first.
This page doesn’t list what triggers an audit. The CRA says it selects files through a risk assessment and compares your information with similar files, and no list of triggers was found. Treat anyone who offers one with suspicion, because it would be a guess.
Sources, and how we checked them
The audit process, the six-year records rule and the 30-day response period come from the CRA publication “What you should know about audits”. The review programs come from the CRA page on types of review, read in September 2026. The tax example uses 2026 federal and Ontario rates.
Frequently asked questions
Is a CRA review the same as an audit?
No. The CRA says that selecting your return for review does not mean a tax audit. A review usually asks for documents on your return.
How does the CRA start an audit?
An auditor contacts you by mail or phone, or both, and gives the date, time and place.
How long do I have to answer a proposal letter?
The CRA publication on audits says 30 days.
How long should I keep records?
The CRA says at least six years.
Can I disagree with the result?
Yes. You can ask the auditor's team leader to review it, and you keep the right to appeal a reassessment.
- 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