Have You Received a Letter from the CRA Regarding Business or Employment Expenses?

CRA Audits, Income Tax Minimization, Tax, Tax Alert

Have You Received a Letter from the CRA Regarding Business or Employment Expenses?

Are you wondering why you received this letter and what it means? If so, you are not alone.

In 2010, the Canada Revenue Agency (“CRA”) began a letter campaign to inform individuals about certain expenses they are deducting. For instance, one of these CRA letters will state the following

You have reported $X,XXXX in advertising and promotion (example) expenses in 2014 as an employment (or business) expense. The CRA is asking you to review this amount as taxpayers often make common errors with advertising and promotion expenses. To help taxpayers comply with their obligations, each year, the CRA contacts those individuals whose returns are more likely to contain these types of errors.

You will find included with this letter detailed information on advertising and promotion expenses, which should help you determine if your 2014 return requires any change(s).

If the amount your reported is incorrect, you can change your return online by going to My Account at www.cra.gc.ca/myaccount or by completing For T1-ADJ T1 Adjustments Request available      www.cra.gc. (click on “Find a form or publication.”) You can also get this form by calling the individual income tax and trust enquiries line at 1-800-959-8281.

You are not being audited at this time. However, should changes to your return be required, please make them within 45 days from the date of this letter, as, later this year, the CRA will be auditing employees who earn commission income and deduct related expenses. Please note that an audit may cover tax years or other items than those mentioned in this letter.

If you need more help, please call the individual income tax enquiries line at the number shown above. For more information about this letter, you may go to www.cra.gc.ca/lettercampaign.

Yours sincerely,


CRA Employee Name
Phone Number

The letter will then have an attachment that explains the related regulations regarding the expense item in question.


The CRA is sending these letters to alert taxpayers that they are “watching” them. Furthermore, the CRA is giving taxpayers the chance to come clean with regards to their expenses.

Receiving these letters does not mean that you will be audited. However, we feel the CRA is indicating that they will be more forgiving if you come clean vs. having improper expenses detected through audit, as they will not only look at the year the improper expenses were detected, but that they may (and likely would) extend their audit to other years.

It is important to note that the CRA is not stating that you have done anything improper. The CRA is only trying to bring to your attention that they certain amounts you have deducted are considered high risk, and, therefore subject to more frequent audits than other amounts.

More information on this campaign can be found at the link below:


It is also important to note that the CRA has a voluntary disclosure program should you have improperly filed your taxes in prior years. In general, the CRA views individuals who come forth through the Voluntary Disclosure Program more favourably than those they find via audit. More information on the Voluntary Disclosure Program can be found at the link below:


If you have concerns that you may have improperly deducted amounts or if you would like the piece of mind that having your income tax returns prepared by a professional brings, please contact us at 705-722-4272 to arrange a consultation.