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The Canada Revenue Agency's review activities

The Canada Revenue Agency (CRA) wants to make sure that you are paying the correct amount of taxes: not too much and not too little.

Each year, more taxpayers file their returns online using NETFILE or EFILE. Although electronic filers do not have to send their receipts to the CRA, they should not send them to the recycling bin just yet! When the CRA reviews tax returns, it will ask taxpayers to send their receipts.

Completing your individual income tax and benefit return can sometimes be complex. The CRA does several reviews to make sure that income, deductions, and credits are accurately reported and filed. These reviews promote taxpayer education by identifying any areas of misunderstanding. There are four main review programs:

• Pre-assessment Review Program
• Processing Review Program
• Matching Program
• Registered Retirement Savings Plan (RRSP) Excess Contribution Program

Canadians file about 25 million individual income tax and benefit returns each year, and all are electronically analyzed. Based on this analysis, certain returns are selected for review because they are high risk; others are selected as part of a random sample used to measure non-compliance for all taxpayers.

Under the Pre-assessment Review Program, the CRA electronically analyzes returns to identify situations that represent a higher risk of tax loss. Various deductions and credits are reviewed and contact with the taxpayer may be made by mail before a notice of assessment is issued.

After a notice of assessment is issued, returns go through the Processing Review Program where they are reviewed to make sure that certain claimed deductions and credits are accurate and are supported by documentation. The CRA may also ask you for proof of payment. In specific instances, you may be asked to send additional information to support your claim, such as cancelled cheques or bank statements.

When a return is selected for review, the taxpayer is notified by mail. If a review identifies an error, the taxpayer will receive a new notice of assessment. If no error is identified, the taxpayer will receive a letter stating that no adjustment is necessary.

The Matching Program ensures that information slips filed by a third party, such as an employer or a bank, correspond to the information reported by the taxpayer. Payers and financial institutions submit to the CRA a copy of all slips they issue to taxpayers, which the CRA cross-references with returns after notices of assessment are issued.

All returns are matched to third-party information slips. If there is a discrepancy between the income reported by a taxpayer and the income reported by a third party, the CRA may contact the taxpayer by mail or telephone for clarification. If the Agency determines that an adjustment is required after completing the review, the CRA will send a new notice of assessment to the taxpayer.

The RRSP Excess Contributions Review Program ensures that taxpayer records are correct and that any required T1-OVP, Individual Tax Return for Excess RRSP Contributions, is filed by taxpayers. Through this program, the CRA identifies taxpayers with potential RRSP excess contributions and communicates with them to review their situation. If the CRA determines that tax is applicable after completing the review, the CRA will send a notice of assessment to the taxpayer.

Individuals will have RRSP excess contributions in 2009 if their unused RRSP contributions for 2009, plus any contributions made from March 3, 2009, to December 31, 2009, exceed their RRSP deduction limit shown on their most recent notice of assessment. RRSP excess contributions may be subject to a 1 % tax per month.

For the 2008 tax year, about 1.2 million returns were reviewed using the Pre-assessment Program and the Processing Review Program. The CRA also reviewed about 2 million returns using the Matching Program. Approximately 68,000 returns were reviewed under the RRSP Excess Contributions Review Program.

For more information on the Pre-assessment Program, the Processing Review Program, the Matching Program and the RRSP Excess Contribution Review Program, go to www.cra.gc.ca/reviews.

This document is also available for download in PDF format.

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Date modified:

2014-12-03