What Should I do if CRA Arbitrarily Assesses My Tax Return?
Canada Revenue Agency’s (“CRA’s”) arbitrary tax assessment, commonly known as notional or involuntary assessment is when you have not yet filed your tax return by the required deadline, usually April 30th for individuals, or June 15th for self-employed people, and CRA completes an assessment on your behalf by estimating (guessing) your income. Such assessment is usually not in your best interest and usually results in taxes payable as well as associated penalty and interest.
There are a few ways CRA can have access to your unreported income information. For example, tax slips could have been filed by someone else, or calls have been made to CRA[i]. Reporting of the tax evasion is most often used as a revenge for unreported income by former spouses or former business partners.
Once you have been involuntary assessed, you need to file a return right away as this may result in less taxes owing. It is a good idea to retain a professional accountant who can assist you with the filing, as well as making installment arrangements with CRA on your behalf.
If you have received an arbitrary assessment and need assistance, please contact one of our tax professionals at 705.722.4272 or fill out the contact form on the right.
[i] Tax evasions can be reported via internet, by telephone, mail, or fax, or by visiting one of CRA’s tax services offices. http://www.cra-arc.gc.ca/gncy/nvstgtns/lds/faq-eng.html#q1