Get all the latest updates on CRA Notice of Reassessment: What is Notice of Reassessment and Why Did You Get It? The tax returns filed by Canadians are assessed by the Canada Revenue Agency (CRA), and some citizens will get an unexpected tax bill or CRA reassessment notice. This post will briefly describe the reassessment notice and how to respond to it.
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CRA Notice of Reassessment
The filed tax returns are typically reviewed by the Canada Revenue Agency (CRA). Once the initial review is completed, people will receive the notice of assessment (NOA), and it is again reviewed by the agency. If an error or any discrepancy occurs, it will send the Notice of Reassessment (NOR). If the CRA reassesses the return, it will review it in depth. However, the reassessment includes the same crucial details as the initial assessment of the tax returns.
The reassessment does not mean the taxpayers are audited or they commit any tax fraud, the smallest errors like the input of incorrect contact details, personal details, or any other details led to the reassessment. The reassessment typically takes three years from the date mentioned on the initial assessment notice. However, if any fraud is suspected, the agency returns outside this three-year assessment period.
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What is a Notice of Reassessment
It is crucial for taxpayers to know about the reassessment that is conducted by the CRA. If there is any issue found in the tax returns, a notice will be received by the people for assessment, which is again reviewed by the CRA. If still, the issue persists, then people will receive the Notice of Reassessment. During the review of tax returns, if the owed taxes are found by the CRA in the previously found returns, penalties will be applied.
In addition to this, the compound interest will be charged by the CRA daily from the date of originally due taxes, not just from the reassessment date. On the basis of the size of the tax bill of the taxpayer and the tax years involved, this interest could be significant. It is crucial to note that the CRA review does not mean fraud, the slight mistake could also lead to a review or reassessment. If there is minor incorrect information, individuals should correct it or pay their taxes, it does not lead to legal actions.
Why Did You Get Notice of Reassessment?
Individuals are responsible for providing correct information to the CRA when filing their tax returns. The taxpayers can receive reassessment notice even for minor mistakes, such as incorrect input of contact number or any other personal details. These minor mistakes will not lead to major or legal actions. Taxpayers can correct them or pay the taxes or owed money and move on.
However, if there is any fraudulent case suspected by the CRA, it will lead to major legal action against the taxpayer. Typically, CRA will take around three years to complete the reassessment process. For instance, if the original assessment starts in May 20219, CRA will go back and review the tax return of 2018 until May 2022, which is three years from the date of the assessment notice.
How To Respond To a Notice of Reassessment?
It is the responsibility of the individuals to provide the correct information to the CRA. However, if any mistake shows up during the assessment and taxpayers receive the reassessment notice, then there are certain policies and guidelines to help the taxpayers and ensure the accuracy of tax returns. Individuals should pay the taxes they owe.
On the basis of the owed amount, it could be challenging for people to make the payment for the CRA reassessment. Individuals should provide accurate details of their income, expenses, debts, and others and resolve the matter. In certain situations, CRA might be willing to get monthly payouts rather than lump sums, so it is crucial for individuals to work with professionalism while dealing with such negotiations.
All We Know
The CRA will review the filed tax returns, and in case of any errors or discrepancies, the taxpayers will receive the reassessment notice. However, if individuals disagree with the reassessment, they can file a formal objection. People should consult a tax consultant to make the objection successful, otherwise, it will be rejected with another penalty.
To avoid such situations, individuals should file correct and accurate returns and, for late filing, notify the CRA of a valid reason. For more information on the CRA reassessment notice, refer to its main website, and for upgraded facts on the same, keep browsing this web page.
