Received a Reassessment Notice – Now What? – A Complete Guide by a Montreal CPA Firm Near You

Introduction

Receiving a Notice of Reassessment from the Canada Revenue Agency can be stressful and confusing. CRA issues reassessments for many reasons—missing T-slips, mismatched information, denied expenses, audit adjustments, incorrect credits, GST/HST inconsistencies, rental or business income corrections, or new information from employers, banks, and third-party databases. A reassessment can increase your balance owing, reduce your refund, or alter your tax attributes. Whether you agree or disagree, CRA expects you to understand the changes and respond appropriately. This guide explains exactly what a Notice of Reassessment means and what steps you should take immediately.

Legal and Regulatory Framework

CRA’s authority to reassess is found under section 152 of the Income Tax Act. CRA may reassess your return within the normal reassessment period—generally 3 years for individuals and CCPCs and 4 years for larger corporations. CRA can reassess older years if they believe you made a misrepresentation, omission, or error due to negligence or carelessness. A Notice of Reassessment includes revised income amounts, tax recalculations, interest charges, penalties (if applicable), and a clear explanation of changes. It also outlines your legal right to file a Notice of Objection within 90 days. These rules form the legal basis of CRA reassessments.

Key Court Decisions

In Bisaillon v. Canada, the court allowed CRA to reassess years outside the normal period due to misrepresentation. In Goldman v. Canada, CRA successfully reassessed based on third-party banking information, and the court upheld their decision. ConocoPhillips Canada Resources Corp. v. Canada confirmed the importance of strict objection deadlines and the consequences of missing them. In Redeemer Foundation v. Canada, CRA’s use of external data to support reassessments was validated. These cases show that reassessments must be addressed quickly and strategically.

Why CRA Issues Reassessments

CRA commonly issues reassessments for missing income slips (T4, T5, T3, T4A, T5018), incorrect deductions, denied expenses, childcare or medical credit adjustments, rental or business loss issues, capital gains corrections from T5008 mismatches, foreign income not reported, RRSP overcontributions, GST/HST discrepancies, cryptocurrency or online platform income, or benefit repayment reconciliations. CRA receives extensive information from employers, banks, brokerages, payment platforms, foreign tax agencies, and provincial authorities, making mismatches a frequent occurrence.

What To Do After Receiving a Notice of Reassessment

1. Read the Reassessment Carefully

Review changes to income, credits, expenses, penalties, and interest. Confirm whether CRA added income, denied expenses, corrected credits, or made adjustments linked to a prior audit.

2. Compare CRA’s Calculations to Your Filed Return

Identify exactly what changed. Determine whether CRA’s adjustment is based on a missing slip, bookkeeping error, denied deduction, GST/HST mismatch, or external information.

3. Decide Whether You Agree or Disagree

If you agree: pay the balance owing (or set up a payment arrangement) and review how to prevent similar errors. If you disagree: you have the legal right to file a Notice of Objection within 90 days and pause collection on the disputed amount.

4. If You Cannot Pay

CRA allows payment arrangements. You may also apply for Taxpayer Relief for penalties and interest if circumstances beyond your control contributed to the issue. Ignoring the balance leads to aggressive CRA collection measures.

5. Examine CRA’s Explanation of Changes

This section may list mismatched slips, disallowed expenses, inconsistent figures, or audit findings. Use this explanation to build your response or prepare your objection.

6. Gather Supporting Documentation

Depending on the issue, gather receipts, invoices, bank statements, donation slips, mileage logs, medical expenses, rental or business bookkeeping, investment summaries, GST/HST filings, and correspondence. Proper documentation is essential for challenging CRA.

7. Consider Filing a Notice of Objection

A formal objection protects your rights, pauses collection on the disputed portion, and transfers your file to CRA Appeals, where an independent officer reviews your case. A strong objection package dramatically improves outcomes.

Mackisen Strategy

At Mackisen CPA Montreal, we help clients handle reassessments with clarity and control. We review the reassessment line-by-line, identify errors, analyze mismatches, gather supporting evidence, reconstruct missing documentation, communicate with CRA on your behalf, prepare and file Notices of Objection, negotiate payment arrangements, and request penalty relief when appropriate. Our strategic approach protects you from unnecessary taxes and ensures accurate results.

Real Client Experience

A consultant was reassessed for missing T4A income. We proved the slip was incorrect and reversed the reassessment. A landlord lost rental deductions due to missing receipts; we reconstructed expenses and restored most claims. A crypto investor was reassessed after CRA added gains from T5008 slips; we documented adjusted cost base and corrected CRA’s interpretation. A corporation faced GST/HST mismatches; we reconciled filings, and CRA withdrew the proposed adjustments.

Common Questions

Do I need to pay immediately? Only if you agree. If you disagree and file an objection, collections are paused on the disputed portion. Will interest stop? Interest continues unless relief is granted. Can CRA seize my bank account? Yes—unless the amount is under objection. What if CRA is wrong? A Notice of Objection is your legal remedy.

Why Mackisen

With more than 35 years of combined CPA experience, Mackisen CPA Montreal helps individuals and businesses respond to CRA reassessments accurately and strategically. Whether you owe tax, disagree with CRA’s findings, or need to contest an adjustment, our firm protects you with precision, expertise, and strong representation.