Let’s kill the myth: the Canada Revenue Agency (CRA) is not an infallible financial machine. It’s made up of people, and humans make mistakes. And when they do? You have every right to challenge it strategically, clearly, and with professional help from an expert who specializes in resolving CRA disputes.
This isn’t about becoming an outlaw. It’s about protecting yourself from errors that can cost you thousands. When the CRA gets it wrong, you’re the one left holding the bill.
Let’s fix that.
What Triggers a CRA Tax Assessment (and Why It Might Be Wrong)
If your mailbox just got hit with a thick envelope from the CRA, or your inbox notified you of impending CRA doom, and your blood pressure spiked? You’re not alone.
The CRA doesn’t assess taxes manually anymore. Most assessments are triggered by algorithms that detect patterns, irregularities, or “anomalies.” That could mean:
- You reported income that doesn’t match a T4 or T5 slip
- You claimed a larger-than-normal deduction (even if it was legit)
- You had self-employment income
- You filed late or amended a return
- You claimed home office or vehicle expenses that are higher than the average for your industry
- You’re in a high-risk category, like digital creators or small business owners
These are all CRA audit triggers. And while some of these flags are reasonable, they aren’t always accurate. The system doesn’t know your life. It doesn’t know context. It just sees a number it doesn’t like, and spits out an assessment.
The problem? It’s up to you to prove them wrong.
Common CRA Errors That Could Cost You Thousands
CRA analysts and tools process data quickly, but context can get lost. And when context is missing, errors happen. Here are some of the most common:
- Legitimate business expenses were rejected because receipts weren’t descriptive enough
- RRSP contributions applied to the wrong year
- Tax credits missed entirely
- Self-employment income double-counted
- Foreign income wrongly taxed as domestic
- Misinterpretation of investment gains vs capital gains
These aren’t small errors. These are the kinds of mistakes that turn into $5,000 reassessments and years of unnecessary stress. If you don’t know what to look for, you’ll pay for it.
Your Right to Push Back: Understanding the Notice of Objection
Let’s get legal for a minute.
When you receive a Notice of Assessment (NOA) and disagree with it, you don’t have to accept it. Your legal response is called a Notice of Objection.
This isn’t a complaint letter. It’s a formal tax form that tells the CRA: “I disagree, and here’s why.”
Important details:
- Deadline. 90 days from the date on your assessment (not the day you opened it, not the day you cried in the shower)
- Format. You can file online via My Account/My Business Account, or use Form T400A
- Tone. Professional, factual, with clear evidence backing your position
You need to be calm, direct, and organized. Emotional arguments won’t help you. Documentation will.
Once you file your objection, it gets reviewed by a CRA appeals officer, not the same person who issued the original assessment. That means you get a fresh set of eyes. Use the opportunity wisely.
Deadlines and Paper Trails: Timing Is Everything in Tax Disputes
Let’s break down the actual timeline:
- Notice of Assessment received
- 90 days to file a Notice of Objection
- CRA reviews your objection (this can take months)
- If denied or unresolved, you have another 90 days to take it to Tax Court
That’s it. Miss those deadlines and your options close like a door that locks behind you.
Now, about that paper trail. Keep everything. Every letter. Every email. Every phone call (with names, dates, and what was said). If the CRA changes reps, your records will be your only consistency.
Receipts? Organize them. Bank records? Match them to claims. Did you call the CRA and get verbal confirmation on something? Document it.
Going Beyond the Objection: Appeals Division and Tax Court Basics
So you filed your objection, and the CRA still says “no”? You’re not out of options.
Next up is the CRA Appeals Division. This is where things get real. You’re dealing with senior officials who are trained to reassess both the facts and how the CRA handled your objection.
At this stage, you need to:
- Present your case clearly
- Include relevant case law or precedent (your tax pro can help)
- Stay persistent. Delays happen, but don’t let them drag on for years
Still no dice? Then it’s Tax Court of Canada time.
Here’s the good news: most cases settle before you ever get to court. Just preparing to go that far often signals that you’re serious, and many CRA lawyers will recommend settling to avoid a legal mess.
When to Call in Reinforcements: Why Professional Representation Matters
You wouldn’t go to court without a lawyer. Don’t go to a tax battle without a seasoned tax consultant.
When the CRA challenges your return, it’s no longer just about filing. It’s about:
- Interpreting the Income Tax Act
- Using financial language they respect
- Framing your case around CRA policy and precedent
- Negotiating, not pleading
Professional representation gives you leverage. It also gives you protection. One wrong word on a call with a CRA agent can backfire. Pros know how to talk to them, and when not to.
You don’t need to fight alone. And you shouldn’t.
How Faris CPA Strategically Handles Tax Disputes (And Wins)
At Faris CPA, this is our bread and butter.
We don’t panic when clients come to us with a seemingly air-tight reassessment. We reverse-engineer the CRA’s logic and rebuild the case from the ground up.
Here’s how we do it:
- Step 1. Audit the assessment for errors, assumptions, and omissions
- Step 2. Gather the correct documentation, timelines, and receipts
- Step 3. File a clear, deadline-safe Notice of Objection
- Step 4. Follow up with the CRA until it’s resolved
- Step 5. Escalate to appeals or Tax Court if needed. Our goal, however, is to always resolve cases in our clients’ favour without an escalation, and we have the track record to prove it.
- Step 6. Win, whether through settlement, reversal, or correction
Whether you’re wondering how far back the CRA can audit you or you’re facing serious CRA tax audit penalties, we’ve seen it all. We’ve fought it all.
And we’ve won.
Real Case Scenarios: From Overturned Penalties to Settled Balances
Let’s talk receipts. Not the paper kind. The real-world results kind.
Case 1:
A Shopify seller got reassessed for over $40,000 due to “undeclared income.”
Problem? The CRA misclassified business deposits as personal gifts.
Outcome: Full reversal. No penalties. Client refunded.
Case 2:
A freelance web designer had their home office expenses and software subscriptions denied.
Outcome: We proved business usage and got the deductions approved.
Case 3:
A digital creator was hit with penalties for unfiled tax returns, even though they had submitted them via a third-party platform.
Outcome: Penalties removed. CRA acknowledged the submission error.
Case 4:
A small business owner panicked after making an honest mistake on a GST return and called us asking: “What happens if you make a tax mistake?”
Outcome: We filed a voluntary disclosure and adjusted the return. No penalties.
These aren’t rare wins. They’re daily ones.
What You Can Do Now to Strengthen Your Case
If your CRA assessment is wrong, don’t wait. Start here:
- Get a complete copy of your Notice of Assessment
- Request your CRA account history and notes
- Compare your return to your assessment line by line
- Organize all supporting documents: bank statements, invoices, receipts
- Draft a clean explanation of your position; factual, not emotional
- Use online platforms like My Account or ReFile if there’s a clear fix
If you’re unsure where to start, book a call. Even one consultation can stop a snowball of errors before it becomes an avalanche of debt.
What Happens After You File a Notice of Objection?
You wait, but not passively. Once your objection is filed, the CRA assigns an appeals officer. That can take weeks or months. While you wait:
- Keep collecting supporting documents
- Review your original return again with fresh eyes
- Don’t engage in casual conversations with CRA agents about the case
This isn’t idle time, it’s prep time.
Can You Still Amend Your Return After Getting Assessed?
Yes. If the issue is with your numbers, not theirs, you might benefit more from adjusting your return than objecting. Use this if:
- You made a clerical or reporting error
- You forgot a credit or deduction
- The CRA actually assessed your return correctly based on wrong information you gave
Start with adjusting your tax return here: T1-ADJ Guide
Should You Pay First, Then Dispute?
Short answer: it depends.
- If you can afford it, paying upfront stops interest from snowballing
- If you win the dispute, you get refunded
- But if the amount is large, paying before resolving might create more financial stress
Weigh this decision carefully with your rep.
What If the CRA Doesn’t Respond?
They might ghost you. Not intentionally, but possibly due to a backlog.
After 90 days with no decision, you have the right to take your case to Tax Court. It’s called a deemed denial. Don’t wait forever hoping they’ll get back to you.
CRA Language Barriers: What If English Isn’t Your First Language?
Misunderstandings can snowball into assessments. That’s why Faris CPA offers multilingual services in Arabic, French, Mandarin, and more.
If you received an assessment and don’t fully understand the wording or terminology, don’t guess. Ask us.
The CRA Might Not Care About Stress, But We Do
The CRA doesn’t generally consider personal stress or anxiety as part of a dispute. They care more about paperwork, numbers, and timelines.
We care about how it’s affecting your life, your sleep, and your work. That’s why we don’t just defend your numbers, we give you back your bandwidth.
The Truth About Penalties: Are They Negotiable?
Yes. CRA penalties can be challenged, reduced, or even cancelled. Especially if:
- You made an honest mistake and fixed it quickly
- You were dealing with hardship (medical, financial, etc.)
- The CRA’s assessment was flawed to begin with
It’s not guaranteed, but it’s possible. We’ve seen it.
Late Filing vs. Non-Filing: Know the Difference
- Late filing means you submitted, just not on time
- Non-filing means they never received your return at all
The consequences of unfiled tax returns are severe: automatic penalties, assumptions about your income, and often, aggressive audits. Avoid this spiral at all costs.
Digital Creators and the CRA: Why You’re Targeted
If you earn money on TikTok, YouTube, Etsy, or OnlyFans, you’re considered self-employed, and the CRA eyes you more closely.
They sometimes assume creators don’t report all income or inflate expenses. That’s not paranoia; it’s documented audit policy.
You need airtight records and a solid understanding of what you can and can’t claim. We help creators every week. This is our turf.
You Can Request CRA’s Internal Notes, And You Should
The CRA keeps a record of every interaction, internal memo, and case decision related to your file.
You can file an Access to Information Request to get those notes. Sometimes, they reveal major errors or unfair assumptions.
This move can change the game.
T1 vs T2 Disputes: Know What You’re Fighting
- T1 = personal taxes
- T2 = corporate returns
T2 disputes are more complex, with stricter documentation standards. If you’re incorporated and got reassessed, don’t wait; corporate audits escalate fast and hit harder.
Don’t Mix Personal and Business Accounts
If you’re self-employed and you use one account for both groceries and client payments, expect the CRA to challenge your deductions.
Clean separation = fewer arguments = stronger defence.
Keep Your Receipts, But Organize Them Like a Lawyer
Shoving everything into a shoebox won’t help you now. Receipts should be:
- Dated
- Legible
- Matched to a category (travel, meals, home office)
- Linked to the work performed
Digital records count, but only if they’re stored properly. The CRA won’t chase down your Dropbox.
Don’t Rely on Verbal CRA Advice
If you call the CRA and an agent says something helpful, amazing. But unless it’s in writing? It’s not binding.
If you’re ever given advice over the phone, immediately send a written follow-up confirming it. If they reply (even better), it becomes part of your file.
When the CRA Applies Interest Incorrectly
Interest charges are automatic, but not always accurate.
If the CRA applied interest to an incorrect balance or continued charging it after your payment, it’s disputable.
We’ve had entire interest charges wiped out with the right paperwork.
Credit: Getty Images
Use This Checklist Before Filing an Objection
Quick self-audit before you hit “Submit”:
- Is your objection within 90 days of the assessment?
- Do you have a copy of the NOA?
- Do you have documentation for every disputed point?
- Is your argument fact-based and clearly written?
- Did you check for typos or clerical errors?
If any of these are missing, fix them first.
You’re Not a Tax Lawyer. You Don’t Need to Be
Tax law is complex for a reason: it wasn’t written for normal people. That’s why hiring someone who reads it for breakfast matters.
Our clients aren’t tax experts. They’re people who know when to call one.
What to Do If You Haven’t Filed Yet and You’re Panicking
First: breathe. Then:
- Pull your T-slips, receipts, and invoices
- Get your past returns in order
- Use our CRA tax audit support if you’re worried about triggers
- File as soon as possible
- Then worry about objections if needed
Filing late is fixable. Filing wrong, however, can open a new can of worms.
Yes, You Can Win Against the CRA
We’ve said it before, but it needs its own headline.
This isn’t a rigged system. It’s just one stacked in favour of the prepared. If you have strategy, timing, receipts, and professional backup, you can win.
And we’ve got the client list to prove it.
Not Sure Where to Start? All You Have to do is Call
You don’t need to decide everything today. But one call can shift the weight off your shoulders. We’ll tell you if your case is winnable, how to move forward, and whether to fight or file.
It’s free. It’s confidential. And it could save you thousands.
CRA “Arbitrary Assessments” Are a Real Thing
If you don’t file, or they think you’re hiding something, the CRA can issue an arbitrary assessment: a best guess based on limited data. They are usually not accurate and use numbers that work against you.
Don’t ignore it. You can dispute them, and we’ve had plenty set aside when challenged correctly.
The CRA Might Reassess You Again. Be Ready
Even if you win your current objection, the CRA isn’t done forever. They can reassess future years. They can audit retroactively. (Wondering how far back they can go? It depends on whether they allege misrepresentation.)
Winning now doesn’t mean relaxing; it means preparing for next time. We’ll help you build that firewall.
Don’t Use TurboTax Screenshots as Evidence
We’ve seen it. Clients try to defend deductions with screenshots of DIY tax software entries.
Nice try, but no. The CRA needs receipts, contracts, or original T-slips. Your interface history won’t cut it. Use real, traceable, verifiable documentation. Always.
If You’re Being Audited, You’re Already Under the Microscope
Objection and audit timelines often overlap. If you’re being audited and you file an objection, assume everything you submit will be scrutinized.
This is not the time for guesswork or half-truths. Our CRA audit strategy is surgical, because this is where bad cases go to die or win.
Getting Ghosted by Your Accountant? It Happens
Plenty of clients come to us after getting reassessed and abandoned by the person who filed their return.
Here’s the truth: not all tax preparers are equipped to handle disputes. If your accountant disappears the moment the CRA shows up, call us. We pick up where they flake out.
The Bottom Line: Don’t Settle for the CRA’s First Word
The CRA’s assessment isn’t law. It’s just their take.
You have rights. You have time (if you act fast). And you have backup, if you ask for it.
Faris CPA is known for sharp, strategic tax dispute support across Canada. We serve creators, consultants, small business owners, and everyday Canadians who just need a fair shake. We offer virtual services, multilingual support, and real solutions.
If you’re ready to challenge a tax assessment that doesn’t feel right, we’ll help you get it corrected. You don’t need to roll over.
You need to push back. Professionally and effectively.
