Why does the CRA review/pre-assess individual tax returns and what do they usually look for?
Allan Madan, CA
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:
- 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.
- 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.
Disclaimer
The information provided on this page is intended to provide general information. The information does not take into account your personal situation and is not intended to be used without consultation from accounting and financial professionals. Allan Madan and Madan Chartered Accountant will not be held liable for any problems that arise from the usage of the information provided on this page.
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.
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