Why does the CRA review/pre-assess individual tax returns and what do they usually look for?

The CRA will request further documentation, as part of their review, of some credits/deductions claimed on your personal tax return. This usually only applies to those returns that have been filed electronically. Some of the credits/deductions that draw some scrutiny from the CRA are items like medical expenses, donations, moving expenses, eligible dependant credit, child amount, and a few others.The CRA does this for a few reasons, a couple of which are mentioned below:

1. When filing a return electronically, the supporting documentation cannot be sent at that time. The CRA then uses this opportunity to do its due diligence.
2. The CRA wants to determine the validity of credits/deductions which are not that common.

The CRA wants to see proof for the expenses, which can take many forms, like receipts, letters of representation from medical practitioners, letters from employers/daycare providers, official certificates, and financial records. The nature of the documentation requested depends on the credit/deduction being questioned.

ABOUT THE AUTHOR

ALLAN MADAN

CA.CPA.CGA

Allan Madan is a CPA, CA and the founder of Madan Chartered Accountant Professional Corporation. Allan provides valuable tax planning, accounting and income tax preparation services in the Greater Toronto Area.

Related Resources