Nobody likes to do taxes, but even more so nobody likes to be contacted by the CRA either. This type of contact can come either by telephone, or by mail. It doesn’t always mean that you are in tax trouble, so there is no need to panic. It also doesn’t work well to simply try and ignore contact with the tax department.
In most cases there is no reason to fear these government officials, unless of course you are doing something with your tax responsibilities that you shouldn’t be, like avoiding them.
The standard procedure for your taxes is that you file them by the due date, then the CRA processes them, then you get a notice of assessment concerning this. Your notice of assessment will include information as to whether the tax guys agree with your filed return, and if not what changes they made to them.
It is up to you to review this assessment and if you do not agree with it then you have some options for following up with it. If you do agree then no further action on your part is needed, unless they have deemed that you owe money, in which case you need to get it paid.
Another type of contact that you may get from the tax department is what they call a pre-assessment review. This will be prior to you receiving your assessment. They may want to discuss some of the deductions you made or credits that you claimed on your return. Often these are things that just need clarification before they prepare your assessment.
On occasion you will receive your assessment and still receive follow up contact afterwards for the CRS to clarify some things. This is a process review and is the same as the pre-assessment contact except it takes place after your assessment.
On occasion the CRA will contact you afterwards and may have questions regarding other entities that may be affecting your return. For example it could be related to information they received from your bank or investment Company regarding your investment and they need to clarify some things. This is a matching process where they are comparing information.
There are several circumstances that can trigger these types of contact with the tax department. It could be they are just doing a random review. It may be that something on your return raised a flag for concern or need of further information. Sometimes when there are dramatic changes made on a return compared to the previous year, the CRA may scrutinize it more closely.
A lot of times it comes down to simple errors made on the tax return, or not sending the proper information. You can take the hassle out of tax filing by using quality services like the ones we offer here at Toronto Accountant.
