How Far Back Can The CRA Go to Reassess Me?
Many clients ask me, “How long can the Canada Revenue Agency assess me for?”
Or put another way, “How long until I am safe from a CRA reassessment for any given year?”
In civil litigation the period of time that a person has to start an action is called the “limitation period”. In tax disputes, this is not referred to as a limitation period, but instead is referred to as the “normal reassessment period”.
For most Canadian taxpayers, the normal reassessment period for income tax is three years. This means that the CRA has three years from the date that your tax return for a particular year is initially assessed to reassess.
For example, if you are an individual and you filed your return for the 2008 taxation year on April 30, 2009 (i.e. on time), and the CRA issued a Notice of Assessment for that return on June 1, 2009, then the normal reassessment period for your 2008 taxation year will expire on June 1, 2012.
It is the initial assessment of a taxation year that starts the clock counting on the normal reassessment period. This means that if you do not file a return resulting in an assessment, then the clock does not begin to count and the normal reassessment period for that year will never expire.
Mutual fund trusts and corporations that are not Canadian-controlled private corporations have a four year normal reassessment period.
After that normal reassessment period has expired, you can argue that a reassessment is not valid and should be vacated. After the normal reassessment period has expired for a given year, we refer to an assessment of that year as being "statute-barred".
However, there are circumstances in which the CRA can reassess a statute-barred year. Most commonly, the CRA can reassess after the expiration of the normal reassessment period where:
1. the taxpayer signed and filed a waiver within the normal reassessment period in respect of the year; or
2. the taxpayer made a misrepresentation that is attributable to neglect, carelessness or wilful default or has committed any fraud in filing the return or supplying information.
If these circumstances apply, there is no time limit on a CRA reassessment for that year.
However the CRA must prove that these circumstances apply. In other words:
1. the CRA must produce a waiver signed by you for the relevant taxation year; or
2. the CRA must prove that you made a misrepresentation on your tax return for the relevant year and they must prove that the misrepresentation was attributable to neglect, carelessness, wilful default or that you have committed any fraud in filing the return or supplying information.
If you are reassessed more than three years after you filed a return for a taxation year it is worth investigating whether the expiration of the normal reassessment period could be a reason to have that reassessment set aside. You will have to determine when that return was initially assessed in order to figure out when the normal reassessment period expired.
If you want to rely on the expiration of the normal reassessment period you must raise that argument with the CRA Appeals Division or as a ground of appeal in your Notice of Appeal to the Tax Court of Canada.
About Pushor Mitchell Tax Group
When disputes arise we have considerable experience in dealing with the Canada Revenue Agency and in representing clients in income tax and GST appeals. more »
martine macdonald said:
i filed my 2011 income tax on time, i recieved a letter, stateing they were holding my return in Abeyance to review tax credit resulting from my contribution to the Gobal learning initative.(tax Shelter)
Stating these audits are complex and it can take up to 1 year to assess.
Can they actually take up to one year to review my 2011 income tax return?
posted July 16th, 2012 at 9:09 AM
Matthew Kraemer said:
Please call me to discuss your question. The statute-barred period is the only technical limitation on the CRA for how long they can take to issue a reassessment.
posted August 27th, 2012 at 9:57 AM
Marc Evans said:
If somebody has not claimed for 10 years and worked at miscellaneous jobs…How many years can the CRA legally go back for an assessment claim?
posted September 17th, 2012 at 5:10 PM
TKM said:
I have been re-assessed personally the tax year was 2007, but the started re-assessment in October 2011. Just received final re-assessment in Sept. 12, is there recourse.
posted September 20th, 2012 at 4:33 PM
Thomas Fellhauer said:
If you disagree with the Reassessment the appropriate course of action is to file a Notice of Objection and dispute the amounts reassessed. If you do not disagree with the Reassessment you may be able to obtain relief from interest that has accrued during any delay that was caused by CRA inaction or delay.
Please call to discuss the specifics further.
posted October 31st, 2012 at 11:02 AM
Mark said:
I missed a couple of years and filed 2009, 2010 & 2011 altogether last april, through a cga.
The CRA mailed me back stating they were making changes to my submission.
For 2 of the years – I received a refund and for 1 year I had to pay.
On Dec. 24th, they sent me a reassessment letter stating they had made an error and now demanding that I pay them back twice as much as I received from my refund 8 months ago.
This sounds absurd.
In all fairness, if I make a mistake I’m held accountable but if the government screws up, I’m still accountable? WTH!?
posted January 2nd, 2013 at 12:46 PM
Ravi said:
Hi,
Please give me a call regarding reassessment from the CRA.
Thank you. 416-473-5023
posted February 7th, 2013 at 4:04 PM
Eric Brogan said:
I have filed an appeal with the CRA. After 9 months, CRA appeal officer called and stated he would investigate. After 4 months, I called Appeal officer who stated he was promoted and the file would be investigated by another appeal officer. 18 months later, still no appeal decision. The question is: Is CRA bounded by the Charter for the Unreasonable delay section?
posted February 11th, 2013 at 9:46 PM
A Kemp said:
If you dispute a reassessment, when does the statute of limitation come into force?
The return was assessed in 2000, then reassessed in 2006 and a objection was launched in the same year.
posted February 19th, 2013 at 7:35 PM
Stan said:
This may help some of your folks – act states 6 years from date of filing.
http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/ncm-tx/kpng/menu-eng.html
posted April 2nd, 2013 at 11:03 PM
smy said:
My x has been lying about his income, for years trying to get out of paying support for our disabled son. His lawyer says he contacted Rev Canada and they told him they can only go back as far as 2003,I find that interesting as my x first lied in court starting 2002. The year in question of when this all started. So can they provide 2002 is my question.
posted April 16th, 2013 at 3:42 AM
kam said:
i was reassessed for the year 2007 global learning initative and i appealed to that and sent a notice of objection in 2009 and its still not resolved how long do they have to close or give me a decision?
posted April 17th, 2013 at 2:33 PM
Alan Blanes said:
I was wondering why my $131.06 refund that appears on my online CRA account has not arrived since it was calculated on March 18, 2013 according to the message on my web account. I spoke to the phone service today and they said that there was an amount from 1985 that was put into a dormant status in 1989 that was unpaid. I was working as a half time library assistant in 1985 and I can’t believe that I had an amount owing to CRA during that year. What is the best way to enforce statutory barring of any further claims by CRA? I have had no notification of this hidden accounting over the past decades, and I had been paying off what they had billed me for over the past 3 years, and I want CRA held to what they were representing as my owed amount, and I want the $131.06.
posted April 17th, 2013 at 5:27 PM
Khir Goh said:
A friend has received a statement of account for unpaid tax for 1983, 1984 and 1985. He has lived overseas for the last 25 years and was not aware of this debt until a visit to Canada a few years back. Does the statute of limitation apply?
posted May 9th, 2013 at 8:15 PM
DM said:
Hello
I have a question. If I were assessed for 2005 a penalty on my business that is not a corporation, for my payroll account, however the assessment was completed on January 2012, is that a statute barred situation?
Thanks in advance!
posted July 11th, 2013 at 11:47 AM
sue said:
I rec’d paperwork/audit seeking receipts for years 2008 and 2009. Can an individual be reassessed in July 2013 after initial assessment dates of March 2009 (for tax year 2008) and June 2010 (for tax year 2009)
posted July 25th, 2013 at 6:57 PM
sarah said:
Today – sept 30, 2013, my mom was just called by the gov’t to say that she didn’t file her taxes in 2003 or 2006 (she is 100% sure that she did as she has never in her life missed a tax year, plus she had a book keeper who does her taxes every year).
As these 2 years are nearly 8 & 11 years old – do they actually have any ground to stand on? She keeps all her taxes for 7 years so she doesn’t have either of these years, nor does the bookkeeper.
posted September 30th, 2013 at 10:36 AM
Mike West said:
I have been audited for 2009 and 2010 for a dispute totaling around 10,000. They argue my accountant claimed business expenses not allowed under my personal even though I had a Gst number and was claiming money earned through my sides business. We filed a Notice of Objection with further info from our side and were rejected. We are now going to Appeal within the 90 days. What means can CRA go to to recoup the money ie garnish wages, take your car etc. Can they attack any USA accounts I may have and can they attack any accounts under my wife’s name only? Thank you for your time.
posted October 14th, 2013 at 1:01 PM
Khalil Arabi said:
I have been doing income tax for a relative for over 30 years and we never missed filing a return. In August of this year the relative received a notice from CRA that he failed to include a T5018 amount for the year 2003. Subsequently in October he received a notice of assessment claiming that he never filed a 2003 tax return and assessed him $1,275.66 plus interest and penalties for a total of $3,744.42.
I read your article about the statute of limitations and that told me that the reassessment window never closes as according to CRA he never filed. To make things worse, he could not locate the 2003 records anywhere.
Can you please advise what’s the best course of action to take? Thank you very much for the valued information.
posted November 14th, 2013 at 9:06 AM
EAC said:
My Mother passed away this year (2013) and my Father received a request for $150 from the CCRA because she was overpaid from 1987 to 1993. He took it to the Service Canada office who said it was idiotic and was told to write a letter indicating the estate was closed but he has since received two more requests. He’s taking it to the RCMP as I figured it was a scam but since I live in Ottawa (he doesn’t) he’s sending it to me to follow up – it’s requesting a cheque made payable to the receiver general and otherwise looks legit so what is the rule here? Can the CCRA go after their error 20 years later??
posted December 29th, 2013 at 1:50 PM
Shelley said:
Can you answer this question based on the information you provided in your December 2011 article “How far back can they reasses”. When I was married my husband filed our taxes we made a donation to a reputable company for the years 2002,2003,2004. In 2005 the CRA asked for more information on the donation that my then ex-husband made. I provided what I could but had no access to any of his records since we divorced in 2004. In 2010 I received a letter that stated they had received my notice of objection for said years. They stated the objection was being held in abeyance.
I just received a letter January 2014 stating they are finalizing and they want a response how I am proceeding if I don’t respond they will reverse the taxes of that year.
This is over 10 years now– is this possible?
posted February 3rd, 2014 at 3:19 PM
Hali Tuchscherer said:
Hi there… I am a Canadian living in Australia and filed my 2012 tax as a non-resident. The only income I had in that year was from withdrawing approx. $25,000 in RRSP’s and a back pay from my previous job of approx. $850. I received my assessment and on an net income of $26,311, I was assessed $3,831 in federal tax and $2,631 in Alberta tax. That is a total of $6,475 due in taxes on this small income! I am shocked. Is it possible this is an error? Is it possible to re-file as a resident in this case? At a loss.
posted February 13th, 2014 at 12:13 PM