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All You Need To Know About Your Notice Of Assessment & Notice of Reassessment

If the CRA has sent you a notice of Re-assessment, call us now to get help.

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All You Need To Know About Your Notice Of Assessment & Notice of Reassessment

Want to understand what your Notice of Assessment & Notice of Reassessment means?

Each year Canadians file an income tax and benefit return to report their annual income to Revenue Canada, claiming all relevant deductions or credits that may apply. The CRA, in turn, calculates how much tax the taxpayer owes or whether he will receive a refund.

Notice of Reassessment Infograph-01

Once the CRA receives your tax return, it will issue a Notice of Assessment (NOA) that includes a tax assessment summary and outlines the following key line numbers and amounts:

  • Refund or balance owing: The CRA’s Notice of Assessment lets you know if you are getting a refund or if you have a balance owing. You will also see if any corrections have been made to your return.
  • Total household income: That figure is used to determine if you are eligible for several programs.
  • Application for a GST/HST rebate including corrections that have been made on your rebate application.
  • RRSP deduction limit representing the maximum amount that you can contribute to your RRSP.
  • Repayment required for the Home Buyers’ Plan: If you have benefited from a home tax deduction and withdrawn money from your RRSP for the Home Buyers’ Plan, your Notice of Assessment indicates what you need to repay in the current tax year.
  • Tuition, education and textbook carry forward amounts: As part of student tax deductions, this is the amount you can carry forward indefinitely if you do not need the full tuition, education and textbook amounts to reduce your tax payable to zero.
  • Unused net capital losses: Those unused net capital losses can be carried back three years and carried forward indefinitely to be applied against capital gains.
  • TFSA: Your Notice of Assessment shows your TFSA contributions, withdrawals and unused contribution room.

How Long Does It Take to Get Your Notice of Assessment?

It will take a few weeks to receive your notice of assessment in the mail, if it was sent in advance of the deadline. However, it may take considerably longer if you filed your return close to the deadline.

If you would like to access your NOA more quickly, then having an online account with the CRA will be beneficial. Having an online account through the MY Account section of the CRA will allow you to download your assessment or review it at your convenience.

Notice of Objection

Once you receive your NOA, you may disagree with the CRA’s review. You have 90 days from the date that it was issued to appeal the information with the CRA. You may contact the agency as the first line of response and then file a Notice of Objection. Your Notice of Objection should outline the reasons for your objections and provide any supporting documentation. Once the CRA reviews your evidence, they will either agree and send you a Notice of Reassessment, or, in the event that they disagree, send you confirmation of the original Notice of Assessment.

If you disagree with the Notice of Reassessment, then, as before, you have 90 days to file an appeal.

Notice of Reassessment

As mentioned above, a Notice of Reassessment may be generated when you file a notice of objection to the original NOA. Should the CRA agree with your objection, it will reissue an amended notice of reassessment.

However, a notice of reassessment may also take place as part of a random review or when the CRA has a suspicion of fraud. In that case, the CRA may go back three years or more to ask for more information.

Your income tax and benefit return may be selected for review for a number of reasons. These include

  • your compliance history;
  • the types of deductions you claimed; or
  • the information on your return does not match the information from third party sources such as T4 slips.

You should keep your income tax records, including all receipts and documents to support your claims, for at least six years in case your return is selected for review. The CRA may also ask for other documents, such as cancelled cheques or bank statements, as proof of any deduction or credit you claimed.

Be sure to submit any requested information in a timely manner. You can submit them online through the CRA MyAccount  portal or send them by mail or fax.

If you are in dispute at any point with the CRA or you do not feel that the assessment is correct, it is best to consult with an experienced tax lawyer to ensure that your interests are always protected.

Specifically, if the CRA has issued a Notice of Reassessment by contacting you through the pre-assessment or post-assessment review departments, you will want to retain a tax lawyer to provide the information requested. Tax lawyers not only submit the information on your behalf, they also prepare comprehensive submissions that outline your entitlement to any benefits, credits or deductions that you claimed.

Request for Information & Adjustment Request

There are other mechanisms that the CRA may use to review your file other than the notice of assessement or reassessment; these include the Request for Information and Adjustment Request.

Request for Information

A request for information is often mistaken for an audit. It is simply a request by the CRA for more information to support something that appeared on your tax return. Common information requests are for home office expense claims, medical expenses, and tuition receipts.

Adjustment Request

An adjustment request allows you to amend any errors or omissions that you may have made. Forgot to include your child-care expenses? Simply file an adjustment return to correct the error.

In Brief: 

How much interest does the CRA levy on taxes owing?
If the CRA assesses your return and has determined that you owe taxes, you will be changed compound daily interest. Interest charges will begin on May 1 in the year following the last tax year (the day after the April 30 filing deadline). If you have a balance owing for 2019, the CRA charges compound daily interest starting May 1, 2020, on any unpaid amounts owing for 2019. This includes any balance owing if the CRA reassesses your return. In addition, the CRA will charge you interest on the penalties starting the day after your filing due date. The rate of interest the CRA charges can change every 3 months at the prescribed interest rate, which is currently 6%. This applies to overdue taxes, Canada Pension Plan contributions, and employment insurance premiums.
How much will I pay in penalties on taxes owing?
You may have to pay a penalty if your installment payments are late or less than the required amount. We apply this penalty only if your installment interest charges for 2020 are more than $1,000. To calculate the penalty, we determine which of the following amounts is higher: $1,000 or 25% of the instalment interest that you would have had to pay if you had not made instalment payments for 2020. The CRA will then subtract the higher amount from your actual installment interest charges for 2020. Finally, we divide the difference by two and the result is your penalty.
When does the CRA decide that I have to pay taxes by installments?
If you earn income that has no tax withheld or does not have enough tax withheld for more than one year, you may have to pay tax by installments. This can happen if you earn rental, investment, or self-employment income, certain pension payments, or income from more than one job. If you received an installment reminder from the CRA and you have a net tax owing above the threshold limit—more than $3000 if you live in Ontario (or any other province other than Quebec, you will be required to pay by installments.
How much will I pay in penalties for filing my taxes late?
The CRA will charge you a late-filing penalty of 5% for the balance owing, plus 1% of your balance owing for each full month your return is late, to a maximum of 12 months.
How much do I have to pay in penalties for repeated failure to report my income?
If you have failed to report income for multiple years in an amount exceeding $500 for a tax year, then you will have to pay a repeated failure-to-report income penalty. The federal and provincial or territorial penalties are equal to the lesser of:
  • 10% of the amount you failed to report on your return
  • 50% of the difference between the understated tax (and/or overstated credits) related to the amount you failed to report and the amount of tax withheld related to the amount you failed to report
What is the tax penalty for filing my tax return late?
If you owe tax for 2019 and you file your return for 2019 after the due date, the CRA will charge you a late-filing penalty. The penalty is 5% of your 2019 balance owing, plus 1% of your balance owing for each full month your return is late, to a maximum of 12 months.
What is the tax penalty for repeatedly filing my tax returns late?
If the CRA charged a late-filing penalty on your return for 2016, 2017, or 2018, your late-filing penalty for 2019 will be 10% of your 2019 balance owing. In addition, you will be charged 2% of your 2019 balance for each full month your return is late, to a maximum of 20 months.
What is the penalty for making a false statement or making an omission on my tax return?
You may have to pay a penalty if you, knowingly or negligently, made a false statement or omission on your return. The penalty is equal to the greater of
  • $100
  • 50% of the understated tax and/or the overstated credits related to the false statement or omission
Is there a way for me to avoid interest and/or penalties if I have made a false statement, made an omission on my tax return, or filed late?
Yes, you can file an application for relief from interest and penalties through the Voluntary Disclosure Program. The Voluntary Tax Disclosure Program is a tax amnesty program that provides the taxpayer with the opportunity to avoid tax penalties, interest, and prosecution by voluntarily disclosing inaccurate or incomplete information, or disclose information not previously reported in their income tax filings. Eligibility for the Voluntary Disclosure Program includes unreported income, unfiled tax returns, disclosures for excise taxes, income tax filings, source deductions, duties under various statutes and GST/HST filings.  

You work hard for your money. Kalfa Law works hard for you to keep it.

-Shira Kalfa, BA, JD, Partner and Founder

© Kalfa Law 2019

The above provides information of a general nature only. This does not constitute legal advice. All transactions or circumstances vary, and specified legal advice is required to meet your particular needs. If you have a legal question you should consult with a lawyer.

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