What Happens If You Ignore a CRA Audit Request?

When CRA sends an audit request — whether asking for receipts, bank statements, mileage logs, rental documents, GST/HST details, or business records — ignoring that letter is one of the most dangerous mistakes a taxpayer can make. Ignoring an audit request does NOT make CRA go away. In fact, it triggers aggressive enforcement: automatic reassessments, penalties, interest, expanded audit years, account freezes, wage garnishments, and even gross negligence penalties in serious cases. This guide explains what happens when you ignore CRA audit requests, how CRA escalates enforcement, and how to regain control if you've missed deadlines or failed to respond.

Why People Ignore CRA Audit Requests

Taxpayers often ignore audit requests because:
they panic or feel overwhelmed
they misplaced receipts or documents
they think the issue will “go away”
they misunderstand CRA rules
language barriers
illness or family crises
inexperience with bookkeeping
They don’t realize CRA views non-response as refusal to cooperate, which triggers immediate negative assumptions.

What CRA Does When You Ignore an Audit Request

Ignoring CRA typically leads to the following escalation sequence:

1. CRA Sends a Second Request (Strict Deadline)

Usually with a 15–30 day deadline. Failure to respond moves the file to enforcement.

2. CRA Issues an Arbitrary Assessment

CRA estimates your income and tax owing without receiving your documents. These assessments are usually:
much higher than actual income
based on worst-case assumptions
include denied expenses
include penalties

3. CRA Adds Penalties and Interest

Common penalties applied:
late-filing penalty
gross negligence penalty (in severe cases)
disallowed expenses (treated as income)
interest backdated to the original due date

4. CRA Expands the Audit to More Years

If you ignore one audit request, CRA may decide to audit:
three years
six years (especially GST/HST or rental issues)
ten+ years (foreign income or non-disclosure cases)

5. CRA Transfers the File to Collections

Collections can:
freeze your bank account
garnish wages
seize refunds
send Requirements to Pay to clients
Real consequences begin quickly.

6. CRA Assumes All Deposits Are Income

In the absence of documentation, CRA treats:
loans
gifts
transfers
reimbursements
as unreported business income.
This often results in massive reassessments.

7. CRA Issues a Notice of Reassessment

This becomes CRA’s official position. If ignored, it becomes final unless a Notice of Objection is filed within 90 days.

8. CRA May Apply Gross Negligence Penalties

If CRA believes the taxpayer intentionally ignored the audit:
50% penalty on understated tax
severe interest charges
in extreme cases, referral for prosecution

When Ignoring a CRA Audit Request Becomes Dangerous

You are at increased risk if you are:
self-employed
a landlord
a real estate investor
a crypto trader
operating a cash-based business
behind on GST/HST
holding foreign assets
CRA assumes high audit risk in these categories and interprets silence as non-compliance.

How to Recover After Ignoring a CRA Audit Request

Step 1: Do NOT contact CRA audit directly without representation

Misstatements can worsen the case.

Step 2: Hire a CPA immediately

A CPA:
communicates professionally
prepares documents
manages deadlines
controls the narrative

Step 3: Gather all requested documentation

bank statements
receipts
contracts
crypto logs
rental statements
vehicle logs
GST/HST returns

Step 4: Prepare explanations for missing documents

If documents are missing, reconstruction is possible using:
bank statements
vendor confirmations
credit card logs
CRA accepts reconstructions when documented properly.

Step 5: Request auditor notes

To understand what assumptions CRA made.

Step 6: Respond with a complete package

A well-organized submission can reverse CRA assumptions.

If CRA Already Issued a Reassessment

You must:
file a Notice of Objection within 90 days
provide evidence to challenge CRA assumptions
request a collections hold (income tax only)
For GST/HST, negotiate payment arrangements.

If CRA Has Already Transferred to Collections

A CPA can help:
negotiate payment plans
request hardship relief
stop bank freezes
prevent garnishment
Collections is aggressive — act fast.

If Gross Negligence Penalties Were Added

Penalties can be reversed if:
errors were unintentional
documentation proves taxpayer attempted compliance
auditor assumptions were incorrect
timelines support reasonable explanations

How to Prevent This Problem in the Future

open CRA mail immediately
use MyAccount to track notices
hire a bookkeeper
stay current with filings
organize receipts
respond to CRA within deadlines
Most audits become serious only when taxpayers ignore letters.

Mackisen Strategy

At Mackisen CPA Montreal, we take over communication with CRA, recover missed deadlines, reconstruct records, reverse incorrect assumptions, file strong Notices of Objection, negotiate with Collections, and protect taxpayers from penalties and bank freezes. We repair the situation and rebuild compliance.

Real Client Experience

A Montreal contractor who ignored a GST audit request faced a $74,000 reassessment — reversed by reconstructing sales and ITCs. A landlord avoided gross negligence penalties after we clarified rental income inconsistencies. A consultant reversed an arbitrary reassessment caused by ignoring CRA mail. A crypto trader recovered from CRA assumptions after missed records were rebuilt.

Common Questions

Will CRA go away if I ignore them? Never. Can ignoring CRA cause bank freezes? Yes. Can I fix the situation? Yes — with fast action. Will CRA audit more years? Often. Should I respond alone? Not recommended.

Why Mackisen

With more than 35 years of combined CPA experience, Mackisen CPA Montreal helps taxpayers recover from missed CRA audit requests, reverse reassessments, and avoid penalties and collections through expert intervention and strategic defense.