Thousands of Canadians are experiencing that sinking feeling right now—an official-looking envelope from the Canada Revenue Agency asking for more information about their tax return. If you’ve received one of these notices, you’re not alone, and it doesn’t necessarily mean you’re in trouble.
“The CRA conducts post-assessment reviews throughout the year,” explains Jamie Golombek, managing director of tax and estate planning at CIBC Private Wealth. “These aren’t audits—they’re verification processes to ensure the system maintains its integrity.”
According to the CRA’s latest annual report, the agency reviewed over 300,000 tax returns during the 2022-2023 fiscal year. These reviews brought in approximately $2.7 billion in additional tax revenue that might otherwise have gone uncollected.
The process typically begins with a letter requesting documentation to support specific claims or deductions on your return. Common triggers include home office expenses, medical costs, charitable donations, or rental income. For many Canadians who began working from home during the pandemic, this marks the first time they’ve claimed such expenses.
Ottawa accountant Marilyn Trentos has seen an uptick in reviews focusing on newly claimed home expenses. “People who’ve never filed these deductions before are suddenly on the CRA’s radar. It’s not that they’ve done anything wrong—the system flags new patterns in your filing history.”
The timing of these reviews isn’t random. The CRA generally sends notices in summer and fall, after the initial assessment of returns filed during tax season. This strategic timing allows the agency to compare your return against typical patterns among similar taxpayers.
When Lisa Campbell of Winnipeg received her review notice last month, her first reaction was panic. “I thought I was being audited and had done something wrong,” she recalls. “After calling my accountant, I realized it was routine. They just wanted receipts for my medical expenses.”
Reviews differ significantly from audits in both scope and severity. A review typically examines specific line items on your return, while an audit is a comprehensive examination that can span multiple tax years and involve intensive scrutiny of your financial affairs.
The CRA selects returns for review using several methods. Some are chosen randomly, others through computer-based screening that flags statistical anomalies, and some through targeted programs focusing on high-risk areas of non-compliance.
“Most reviews are initiated through risk assessment systems,” says Toronto tax lawyer David Rotfleisch. “The CRA’s algorithms identify returns with a higher probability of error or questionable claims.”
Taxpayers in certain professions may face more scrutiny. Self-employed individuals, particularly those in cash-intensive businesses, real estate professionals, and those with significant investment income often experience more frequent reviews.
If you’ve received a review letter, don’t ignore it. The CRA typically provides 30 days to respond, though extensions are possible by calling the number on your notice. Failing to respond could result in reassessment based on the information available to the CRA, potentially leading to denied claims and increased tax liability.
“Most people worry unnecessarily,” says Ryan Keey, a Vancouver-based tax professional. “If you’ve kept proper documentation and your claims are legitimate, you’ll likely get through the process without any adjustments to your return.”
Organization is key when responding to a review. The CRA wants specific documents—not everything in your filing cabinet. Read the letter carefully to identify exactly what’s being requested. Provide clear copies of receipts, contracts, or other supporting documents, ensuring they match the amounts claimed on your return.
The most commonly reviewed claims include rental losses, significant business expense increases, large charitable donations relative to income, and moving expenses. Medical expenses are also frequently reviewed, especially when they represent a significant portion of income.
Statistics Canada data shows that approximately 8.3 million Canadians claimed medical expenses in 2022, with the average claim around $2,100. Large deviations from these averages might trigger a
