Opening the mail to find a letter from the Canada Revenue Agency (CRA) is enough to elevate any small business owner’s heart rate. However, receiving a CRA review letter does not automatically mean you are being audited or that you are in trouble.
For small businesses and individuals in Ottawa, understanding what the CRA is asking for—and how to respond correctly—is the first step to resolving the issue quickly and avoiding unnecessary penalties.
What is a CRA Review Letter? (And How It Differs From an Audit)
A CRA review letter is a routine request for additional information. The CRA regularly conducts pre-assessment and post-assessment reviews to verify that the claims, deductions, and credits on your tax return match your documentation.
Unlike a full CRA audit—which is a comprehensive examination of your business’s entire financial system and books—a review letter is highly specific. The CRA is usually looking to verify a single line item, such as:
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- Specific business expenses or mileage logs
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- HST/GST input tax credits
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- Payroll deductions
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- Medical expenses or charitable donations
3 Steps to Take When You Receive a CRA Notice
If a letter arrives at your Ottawa office, do not ignore it. The CRA provides strict deadlines for responses (typically 30 days). Failing to respond will likely result in the CRA denying your claim and reassessing your taxes, which leads to a balance owing with interest.
1. Read the Letter Carefully
Identify exactly which tax year the CRA is reviewing, the specific line item in question, and the reference number on the letter.
2. Gather Your Documentation
Compile the exact receipts, invoices, or bank statements the CRA is requesting. Ensure that the totals on your documents perfectly match the amounts claimed on your return. Do not send your entire corporate ledger—only provide what was explicitly requested.
3. Submit Your Response Securely
The most efficient way to submit your documents is electronically through the CRA’s “My Business Account” or “My Account” portals.
When to Call an Ottawa Accountant for CRA Support
While a simple request for a charitable donation receipt can be handled on your own, other reviews carry higher risks. You should immediately engage a professional tax advisor if:
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- You cannot find the requested receipts.
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- The review involves complex corporate expenses, HST returns, or payroll discrepancies.
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- You disagree with a Notice of Reassessment and need to file a Notice of Objection.
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- The letter explicitly states it is a formal Audit.
Let Setupmybooks Handle the CRA for You
Dealing with the CRA is stressful and takes you away from running your business. At Setupmybooks, we routinely handle CRA review letters, HST returns, and audit support for individuals and small businesses across Ottawa and the surrounding areas. We can act as your authorized representative, organizing your documentation and speaking to the CRA on your behalf.
Don’t face the CRA alone. If you’ve received a review letter or need help getting your corporate taxes and bookkeeping in order, Contact Setupmybooks today for a consultation. Let us bring peace of mind back to your business.