Newsletters

Two quarterly newsletters have been added – one dealing with personal issues, and one dealing with corporate issues.

Two quarterly newsletters have been added – one dealing with personal issues, and one dealing with corporate issues.

They can be accessed below.

Corporate:

Issue #73 Corporate

Personal:

Issue #73 Personal

As September approaches, students who are beginning post-secondary education this year have received one or more offers of admission and then chosen a college or university, have hopefully been offered a place in a university residence or have secured off-campus housing, and are making final plans to make the move away from the family home for the first time. While choosing courses for the upcoming fall semester and anticipating the independence of life on their own is undoubtedly exciting, the hard reality is that all such choices and decisions come with a price tag – sometimes a very steep one. Regardless of geographic location, housing arrangements, or program choices, post-secondary learning is expensive. There will be tuition bills, of course, but also the need to find housing and pay rent in what is, in most college or university locations, a very tight and very expensive rental market. Those who choose to live in a university residence and are able to secure a place will also face bills for that accommodation and, often, for a meal plan.

As September approaches, students who are beginning post-secondary education this year have received one or more offers of admission and then chosen a college or university, have hopefully been offered a place in a university residence or have secured off-campus housing, and are making final plans to make the move away from the family home for the first time. While choosing courses for the upcoming fall semester and anticipating the independence of life on their own is undoubtedly exciting, the hard reality is that all such choices and decisions come with a price tag – sometimes a very steep one. Regardless of geographic location, housing arrangements, or program choices, post-secondary learning is expensive. There will be tuition bills, of course, but also the need to find housing and pay rent in what is, in most college or university locations, a very tight and very expensive rental market. Those who choose to live in a university residence and are able to secure a place will also face bills for that accommodation and, often, for a meal plan.

Fortunately for students (and the parents who are likely footing much of the bill), there are tax credits and benefits which can be claimed to offset such costs: the credits and benefits which can be claimed by post-secondary students (or their spouses, parents, or grandparents) in relation to the upcoming 2025-26 academic year are summarized below.

Tuition fees

A federal tax credit continues to be available for the single largest cost associated with post-secondary education – the cost of tuition. Any student who incurs more than $100 in tuition costs at an eligible post-secondary institution (which would include most Canadian universities and colleges) can claim a non-refundable federal tax credit equal to 15% of such tuition costs. Many of the provinces and territories also provide students with an equivalent provincial or territorial credit, with the rate of such credit differing by jurisdiction.

The charges imposed on post-secondary students under the heading of “tuition” include a myriad of costs which may differ, depending on the particular program or institution, and not all of those costs will qualify as “tuition” for purposes of the tuition tax credit. The following specific amounts do, however, constitute eligible tuition fees for purposes of that tax credit:

• admission fees,
• charges for use of library or laboratory facilities,
• exemption fees,
• examination fees (including re-reading charges) that are integral to a program of study,
• application fees (but only if the student subsequently enrolls in the institution),
• confirmation fees,
• charges for a certificate, diploma, or degree,
• membership or seminar fees that are specifically related to an academic program and its administration,
• mandatory computer service fees, and
• academic fees.

The following charges, however, do not constitute tuition fees for purposes of the tuition tax credit:

• Extracurricular student social activities,
• Medical expenses,
• Transportation and parking,
• Board and lodging,
• Goods of enduring value that are to be retained by students (such as a microscope, uniform, gown, or computer),
• Initiation fees or entrance fees to professional organizations including examination fees,
• Administrative penalties incurred when a student withdraws from a program or an institution,
• The cost of books (other than books, compact discs, or similar material included in the cost of a correspondence course), and
• Courses taken for purposes of academic upgrading to allow entry into a university or college program. These courses would usually not qualify for the tuition tax credit as they are not considered to be at the post-secondary school level.

Certain ancillary fees and charges, such as health services fees and athletic fees, may also be eligible tuition fees. However, a tuition tax credit can be claimed only for up to $250 in such fees and charges, unless the fees are required to be paid by all full-time students or by all part-time students.

At both the federal and provincial levels, the tuition tax credit is a non-refundable one, meaning that it can reduce or eliminate tax otherwise payable, but cannot create or increase a tax refund. Where, as is often the case, a student doesn’t have tax payable for the year because their income isn’t high enough, credits earned can be carried forward and claimed by the student in any future tax year or transferred (within limits) in the current year to be claimed by a spouse, parent, or grandparent.

Rent, food, and other personal and living expenses

Unfortunately, although housing and food costs will take up a very big chunk of each student’s budget, there is not (and never has been) a tax deduction or credit which is claimable for such costs. In all cases, living costs incurred by a post-secondary student (whether on campus or off) are characterized as personal and living expenses, for which no tax deduction or credit is allowed.

Student debt

Most post-secondary students in Canada must incur some amount of debt in order to complete their education, and repayment of that debt is typically not required until after graduation. Once repayment starts, a 15% federal tax credit can be claimed for the amount of interest being paid on such debt, in some circumstances. And, while other types of credits related to post-secondary education (like the tuition tax credit) can be transferred to and claimed by other family members, the student loan interest tax credit can be claimed only by the student – no transfer of the credit is allowed.

Students who are still in school and arranging for loans to finance their education should be mindful of the rules which govern that student loan interest tax credit, since decisions made while still in school with respect to how post-secondary education will be financed can have tax repercussions down the road, after graduation. That’s because while interest paid on a qualifying student loan is eligible for the credit, only some types of student borrowing will qualify for that credit. Specifically, only interest paid on government-sponsored (federal or provincial) student loans will be eligible for the credit. Interest paid on loans of any kind from any financial institution will not.

It’s not uncommon (especially for students in professional programs, like law or medicine) to be offered lines of credit by a financial institution, often at advantageous or preferential interest rates. As well, financial institutions sometimes offer, once a student has graduated and begun to repay a government-sponsored student loan, to consolidate that student loan with other kinds of debt, also at advantageous interest rates. However, it should be kept in mind that interest paid on that line of credit (or any other kind of borrowing from a financial institution which is used to finance education costs) will never be eligible for the student loan interest tax credit.

As explained in the Canada Revenue Agency publication on the subject: “[I]f you renegotiated your student loan with a bank or another financial institution, or included it in an arrangement to consolidate your loans, you cannot claim this interest amount”. In other words, where a government student loan is combined with other debt and consolidated into a borrowing of any kind from a financial institution, the interest on that government student loan is no longer eligible for the student loan interest tax credit.

Students who are contemplating borrowing from a financial institution rather than getting a government student loan (or considering a consolidation loan which incorporates that government student loan amount) must remember, in evaluating the benefit of any preferential interest rate offered by a financial institution, to take into account the loss of the student loan interest tax credit on that borrowing in future years.

Other credits and deductions

While the available student-specific deductions and credits are more limited than they were in previous taxation years, there are nonetheless a number of credits and deductions which, while not specifically education-related, are frequently claimed by post-secondary students (for instance, a deduction claimed for moving costs). The Canada Revenue Agency publishes a very useful guide which summarizes most of the rules around income, deductions, and tax credits which may apply to post-secondary students. The current version of that guide (P105 Students and Income Tax, which was last updated in 2024) is available on the CRA website at https://www.canada.ca/en/revenue-agency/services/forms-publications/publications/p105.html.

The process of adopting a child is often a lengthy one, in which a myriad of requirements must be met and legal processes followed. Where the adoption is an international one, the process can be even lengthier and more complex, as often the legal requirements of more than one government must be satisfied, and international travel is required.

The process of adopting a child is often a lengthy one, in which a myriad of requirements must be met and legal processes followed. Where the adoption is an international one, the process can be even lengthier and more complex, as often the legal requirements of more than one government must be satisfied, and international travel is required.

No matter whether an adoption takes place entirely in Canada or involves another country, there are numerous costs which must be met and expenses incurred. Families which incur such costs and expenses can, however, claim a federal tax credit for a significant amount of expenses incurred. And, in six of the 10 Canadian provinces as well as the Yukon Territory, a provincial or territorial tax credit can be claimed for adoption-related expenses.  

Under Canadian tax law a tax credit can usually be claimed only on the return for the tax year in which the related expense is incurred. That’s not the case for the adoption expenses tax credit, which recognizes that the process of completing an adoption can take a number of years from start to finish, especially in the case of international adoptions. The rules governing the adoption expense tax credit provide that all eligible expenses incurred between the start of the adoption process and its completion can be claimed for purposes of the credit, but that that tax credit claim must be made on the return for the year in which the adoption process is completed. 

For purposes of the tax credit, the adoption process is considered to have started at the earlier of the following dates:

• when an application is made for registration with either a provincial or territorial ministry responsible for adoption or an adoption agency licensed by a provincial or territorial government; OR
• when an application related to the adoption is made to a Canadian court.

Similarly, the Canada Revenue Agency provides rules to determine when the adoption process is considered to be complete, meaning that the tax credit for adoption expenses can be claimed on the return for that year. For purposes of the tax credit, the adoption process is considered to be complete at the later of these dates:

• when an adoption order is issued or recognized by a government in Canada for the child; OR
• when the child first starts to live permanently with their adoptive parents.

Once the adoption process is complete, the adoptive parents can claim an adoption expenses tax credit for each of the following types of expenses:

• Fees paid to an adoption agency licensed by a provincial or territorial government;
• Court costs and legal and administrative expenses related to an adoption order for the child;
• Reasonable and necessary travel and living expenses of the child and the adoptive parents;
• Document translation fees;
• Mandatory fees paid to a foreign institution;
• Mandatory expenses paid for the child's immigration;
• Any other reasonable expenses related to the adoption required by a provincial or territorial government, or an adoption agency licensed by a provincial or territorial government.

The total costs incurred throughout the entire adoption process can be significant, and the federal government does set a limit on the amount of such expenses which can be claimed for purposes of the adoption expenses tax credit. That federal limit for the 2025 tax year is $19,580 for all such expenses incurred during the adoption process. The provincial and territorial governments also impose expense limits for purposes of the credit, and a listing of those limits can be found on the CRA website at https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/tax-return/completing-a-tax-return/deductions-credits-expenses/line-31300-adoption-expenses.html. The dollar limit imposed by the province of Québec is available on the Revenu Québec website at  https://www.revenuquebec.ca/documents/en/formulaires/tp/tp-1029.8.63-v%282015-10%29.pdf.

As is generally the case for tax credit or deduction claims, a claim can be made only for eligible expenses which were incurred by the adoptive parents and for which they did not receive assistance or reimbursement.

Adoption, especially international adoption, can be a lengthy and sometimes stressful process which makes physical, emotional, and financial demands on the prospective adoptive parents. While our tax system can’t do anything to lessen the physical and emotional stress involved, it can help to mitigate the sometimes considerable financial costs which must be incurred. More information on how to reduce those costs by making a claim for the adoption tax credit can be found on the Canada Revenue Agency website at  https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/tax-return/completing-a-tax-return/deductions-credits-expenses/line-31300-adoption-expenses.html.

Tax-free savings accounts (TFSAs) have been a part of the Canadian tax system since 2009, and the TFSA program can be utilized by more Canadians than any other tax-advantaged savings program. And Canadians have clearly recognized the benefits: Canada Revenue Agency statistics show that, as of 2022, nearly 18 million Canadians had opened a TFSA.

Tax-free savings accounts (TFSAs) have been a part of the Canadian tax system since 2009, and the TFSA program can be utilized by more Canadians than any other tax-advantaged savings program. And Canadians have clearly recognized the benefits: Canada Revenue Agency statistics show that, as of 2022, nearly 18 million Canadians had opened a TFSA.

There are a number of benefits to saving through a TFSA and some of those benefits cannot be obtained through any other tax-advantaged savings plan. The main benefit provided by the TFSA program is the ability to invest savings, and to earn investment income on those savings, on a tax-free basis, both as such investment income is earned and when it is withdrawn. (Funds contributed to a registered retirement savings plan (RRSP) or held in a registered retirement income fund (RRIF) can similarly grow free of tax, but all such investment gains are taxed when withdrawn from such plans). The TFSA is unique in another way, in that a planholder who withdraws funds from their TFSA account has the ability to re-contribute those funds to that plan in any future year. It’s also the case that (unlike an RRSP) TFSA planholders are not required to have any amount of income in order to make a contribution to their TFSA. The annual contribution limit for a TFSA planholder is set by law and is the same for everyone, regardless of age or income. Finally, each Canadian begins accumulating TFSA contribution room as soon as they turn 18, whether they have opened a TFSA or not.

Details of the rules governing the TFSA program are outlined below. Those rules are fairly straightforward, but there are some aspects of the TFSA rules (particularly around re-contribution of withdrawals) which can trip up the unwary taxpayer, and thereby undermine the tax benefits which a TFSA can provide.

A TFSA can be opened by any Canadian who is age 18 or older (with some variation among provinces, depending on the age of majority in the particular province) and has a social insurance number. There is no upper age limit, meaning that a TFSA can be opened by an eligible Canadian at any point in their life.

The amount that can be contributed to a TFSA annually is set by law, and is partially indexed to the rate of inflation. Annual contribution limits which have applied since 2009 are as follows.

 Annual TFSA dollar limit

2009 to 2012          $5,000

2013 and 2014       $5,500

2015                       $10,000

2016 to 2018          $5,500

2019 to 2022          $6,000

2023                       $6,500

2024 and 2025       $7,000

Contribution room starts accumulating for every Canadian as soon as they turn 18, and continues to grow each year. As well, contribution room carries forward indefinitely, so where a taxpayer does not make any contribution to a TFSA during a particular year (or does not even have a TFSA), the available contribution room can be carried forward and that contribution can be made in any future year, without limit.

For example, someone who is now 30 and has never contributed to or even opened a TFSA started accumulating TFSA contribution room in 2013 (when they turned 18) and would now be able to open a TFSA and contribute $81,000 to that plan. That total is comprised of accumulated contribution room as follows: $5,000 for each of 2013 and 2014, $10,000 for 2015, $5,500 for each of 2016, 2017, and 2018, $6,000 for each of 2019, 2020, 2021, and 2022, $6,500 for 2023, and $7,000 for each of 2024 and 2025.

Contributions that are made to a TFSA are not deductible for tax purposes (in other words, contributions are made from income on which tax has already been paid). However, investment income earned by amounts held within a TFSA are not taxed as they are earned, and both accrued investment income and original contribution amounts are not taxed when withdrawn from the plan.

Finally, the TFSA is the only tax-sheltered plan available to Canadians in which amounts withdrawn from the plan can be re-contributed in a future year. For example, a TFSA planholder who withdraws $7,000 from their TFSA in 2025 can re-contribute that amount in 2026 or any subsequent year. It’s important to note that any such re-contribution cannot be made until the year following the year that funds were withdrawn from the plan.

It's apparent that the ability to invest funds and earn investment income which will never be subject to income tax is of benefit to any taxpayer. There are, however, some individual circumstances in which contributing to a TFSA can be of particular value, including the following.

• Every Canadian taxpayer who has saved for retirement by making contributions to a registered retirement savings plan (RRSP) must collapse that RRSP by the end of the year in which the taxpayer turns 71. In most cases, such taxpayers open a registered retirement income fund (RRIF) into which accumulated RRSP funds are transferred. However, where funds are held in an RRIF, a percentage of such funds must be withdrawn each year and included in income, without exception. Taxpayers who are required to make such RRIF withdrawals and do not have an immediate need for those funds can contribute them to a TFSA. There are two benefits to doing so: first, the funds can be invested and grow on a tax-free basis and no tax will be payable when either the original contributions or the investment gains are withdrawn. Second, such TFSA withdrawals are not counted as income for purposes of determining whether and to what extent the taxpayer is eligible for a number of tax credit and benefit programs available to seniors. In particular, TFSA withdrawals are not included in income for purposes of determining whether the taxpayer’s eligibility for Old Age Security benefits is eroded.
• Taxpayers who are expecting their income to rise significantly within a few years – for example, students in post-secondary or professional education or training programs – can save some tax by contributing to a TFSA while they are in school and their income (and therefore their tax rate) is low, allowing the funds to compound on a tax-free basis, and then withdrawing the funds tax-free once they’re working, when their tax rate will be higher. At that time, the withdrawn funds can be used to make contributions to an RRSP, which will be deducted against income which would be taxed at the much higher rate, generating a tax savings. And, if a need for funds should arise in the meantime, a tax-free TFSA withdrawal can always be made.
• Lower income taxpayers, for whom there isn’t likely to be a great difference between pre- and post-retirement income, are likely better off saving for retirement through a TFSA than contributing to an RRSP or accumulating savings outside any tax-assisted savings plan. That’s especially the case where those taxpayers may be eligible in retirement for means-tested government benefits like the Guaranteed Income Supplement or tax credits like the GST/HST credit or age credit. Withdrawals made from an RRSP or an RRIF during retirement will be included in income for purposes of determining eligibility for such benefits or credits, and lower-income taxpayers could find that such withdrawals have pushed their income to a level which reduces or eliminates their eligibility. On the other hand, monies withdrawn from a TFSA are not included in income for the purpose of determining eligibility for any government benefits or tax credits, so saving through a TFSA will ensure that receipt of such benefits is not put at risk.

The Canada Revenue Agency publishes a guide to the TFSA program, which reviews and summarizes the rules governing the program in detail. That guide, which was updated and re-issued earlier this year, can be found on the CRA website at https://www.canada.ca/en/revenue-agency/services/forms-publications/publications/rc4466/tax-free-savings-account-tfsa-guide-individuals.html.

By the time the end of summer approaches, the tax return filing deadline for all Canadian individual taxpayers has passed, and nearly all tax filers will have filed the required return for the 2024 tax year and received a Notice of Assessment from the Canada Revenue Agency (CRA) with respect to that return. It can, therefore, be extremely unsettling for taxpayers to receive unexpected correspondence from the CRA at this time of year, especially where the Agency is requesting additional information about claims made on the tax return for 2024, despite that return already having been filed and processed. When that happens, the recipients of such correspondence often assume the worst – that they are being or are about to be audited, and that the prospect of a large tax bill, along with penalties and interest charges (or worse), looms.

By the time the end of summer approaches, the tax return filing deadline for all Canadian individual taxpayers has passed, and nearly all tax filers will have filed the required return for the 2024 tax year and received a Notice of Assessment from the Canada Revenue Agency (CRA) with respect to that return. It can, therefore, be extremely unsettling for taxpayers to receive unexpected correspondence from the CRA at this time of year, especially where the Agency is requesting additional information about claims made on the tax return for 2024, despite that return already having been filed and processed. When that happens, the recipients of such correspondence often assume the worst – that they are being or are about to be audited, and that the prospect of a large tax bill, along with penalties and interest charges (or worse), looms.

Happily for such taxpayers, that doomsday scenario is almost never the reality. The most likely explanation for such correspondence is that the taxpayer’s return has been selected for review as part of the CRA’s return verification process. And that taxpayer is far from alone – each year the CRA sends out around 3 million tax review letters, meaning that almost 10% of tax filers receive such a query from the Agency.

The explanation for why so many tax review letters are issued – and the need for the return verification process generally – lies in how Canadians now file their tax returns. When filing a paper income tax return was the norm, taxpayers often filed hard copies of receipts to support claims made on the return for tax deductions or credits, which provided the CRA with the documentation needed to verify any such claims. That, however, is no longer the case. Nearly all (for 2024 returns, the figure is 93%) taxpayers now prepare their annual income tax return (or have that return prepared on their behalf) using tax preparation software, and file the completed return using one of the Agency’s electronic tax filing methods. By definition, those methods do not involve any “paper trail” – that is, documentation which would support the claims made on the return are not filed with that return or, usually, not at all.

In the six months between February 6 and August 24 of this year, the Canada Revenue Agency received and processed just under 30.5 million individual income tax returns for the 2024 tax year which were filed online, and it issued a Notice of Assessment in respect of each one of those returns. The CRA’s self-imposed “service standard” for issuing a Notice of Assessment with respect to a return filed online is around two weeks, even for such returns filed during the busiest part of tax filing season. It’s clearly impossible for the CRA to review each return filed in detail while meeting that processing and turnaround schedule. And, in fact, in order to meet that processing time commitment, the Agency does not review returns at the time of filing. Rather, as stated on the CRA website: “The Canada Revenue Agency (CRA) processes most returns without conducting a manual review of the information reported so that a notice of assessment can be issued as quickly as possible. However, all returns are screened by CRA's computer system and may be subject to review at a later date.”

Most returns filed are accurate and complete and, even where errors (or deliberate fraud) has occurred the amounts involved are, on an individual basis, usually quite small. However, given the number of returns filed each year, the potential exists for the loss of a significant amount of tax revenue for the federal government. And the CRA’s response to that risk is to conduct a wide range of review programs to ensure that amounts reported on a return are accurate and that claims made for tax deductions or credits are justified. While the CRA administers a number of different types of review programs, in all cases the purpose of the review is to obtain from the taxpayer the information or documentation needed to support claims for deductions or credits made by that taxpayer on the return, or to explain any discrepancies noted by the Agency.  

In some cases, an individual taxpayer whose return has been selected under any of the CRA’s review programs may receive a telephone call from the Agency, rather than a letter. As virtually everyone knows by now, fraudulent or “scam” calls in which individuals claim to be from the CRA have become commonplace. Given the prevalence of such fraudulent calls, it’s important that the taxpayer who receives such a call verifies the identity of the person claiming to be a representative of the Agency. To assist taxpayers in confirming that any telephone contact received is a legitimate one, the CRA has provided information on how to respond to such a call; that information can be found on the CRA website at https://www.canada.ca/en/revenue-agency/corporate/scams-fraud/verify-cra-contact.html.

Whether the contact from the CRA happens by phone or by letter, a taxpayer whose return is selected as part of a return processing review program will be asked to provide verification or proof of deductions or credits claimed on the return – usually by way of receipts or similar documentation.

Of course, most taxpayers are not concerned so much with the kind of program or programs under which they are contacted as they are with why their return was singled out for review or follow-up. Most taxpayers assume that it’s because there is something wrong on their return, but that’s not usually the case. Returns are selected by the CRA for review for any one of a number of reasons.

Canada’s tax laws are complex and, over the years, there are areas in which the CRA has determined that taxpayers are more likely to make errors on their return. For instance, one of the most common claims made on individual income tax returns is a claim for the medical expense tax credit. While the rules governing that tax credit are relatively straightforward, the process of determining just which medical expenses qualify for the credit can be anything but. The listing provided on the CRA website of the types of medical expenses which can qualify for the medical expense tax credit has 132 entries. However, not all such expenses are claimable in all circumstances. In some cases a prescription from a medical professional is required in to order to claim the medical expense tax credit for that expense, while in other cases it is not, and the reason for the difference is not always obvious. For instance, the cost of dentures can be claimed as a medical expense without the need for a prescription, but claiming that credit for the cost of eyeglasses requires the taxpayer to have such a prescription. Costs incurred to purchase a wheelchair do not require a prescription to qualify for the medical expense tax credit, but the cost of acquiring a cane or a walker does. As well, some medical expenses can be claimed by all taxpayers, while others can be claimed only by individuals who are eligible for the disability tax credit. 

Given the complexity of the requirements, it’s not hard to see how errors can be made by the taxpayer when making a claim for the medical expense tax credit. Consequently, a return which includes claims for a deduction or credit in areas which the CRA has found to be more likely to include errors made by the taxpayer (which would include, in addition to the medical expense tax credit, claims for the dependant tax credit, moving expenses, or tuition tax credits) has an increased chance of being reviewed. Sometimes, deductions or credits claimed by the taxpayer are significantly different or greater than those claimed in previous returns, and that, too, may attract the CRA’s attention. And, if the taxpayer’s return has been reviewed in previous years and, especially, if an adjustment was made following that review, subsequent reviews may be more likely. Finally, many returns are picked for the processing review programs simply on the basis of random selection.  

The CRA also administers a Matching Program, in which information reported on the taxpayer’s return (both income and deductions) is compared to information provided to the CRA by third-party sources (like T4s filed by employers or T5s filed by banks or other financial institutions). Where figures which appear on an information slip – for instance, the amount of employment income earned – don’t match up with the amount of employment income reported by the taxpayer, they will be contacted to provide an explanation of the discrepancy.

Regardless of the program under which the review is being conducted, or the reason for the follow-up, the process is the same. Taxpayers whose returns are selected for review will be contacted by the CRA, usually by a letter which identifies the deduction or credit claim for which the CRA is seeking documentation, or the income or deduction amount about which a discrepancy seems to exist. The taxpayer will be given a reasonable period of time – usually a few weeks from the date of the letter – in which to respond to the CRA’s request. That response should be in writing, attaching, if needed, the receipts or other documentation which the CRA has requested. All correspondence from the CRA under its review programs will include a reference number, which is usually found in the top right-hand corner of the CRA’s letter. That number is the means by which the CRA tracks the particular inquiry, and should be included in the response sent to the Agency. It’s important to remember, as well, that it’s the taxpayer’s responsibility to provide proof, where requested, of any claims made on a return. Where a taxpayer does not respond to a CRA request or does not provide such proof, the Agency will proceed on the basis that the requested verification or proof does not exist and will reassess accordingly.

Taxpayers who have registered for the CRA’s online tax program My Account (or whose representative is similarly registered for the Agency’s Represent a Client online service) can usually submit required documentation electronically. More information on how to do so can be found on the CRA website at Submitting documents online – Pre-assessment Review, Processing Review and Request Verification Programs - Canada.ca.

Whatever the reason a particular return was selected for review and verification by the CRA, one thing is certain. A prompt response to the CRA’s enquiry, providing the Agency with the information or documentation requested, will, in the vast majority of cases, bring the matter to a speedy conclusion, to the satisfaction of both the Agency and the taxpayer.

More detailed information on the CRA’s processing review process and be found on the Agency’s website at https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/review-your-tax-return-cra.html.