Understanding A CRA Letter Campaign

Understand the purpose of a CRA letter campaign and how to respond to inquiries from the Canada Revenue Agency.

Table of Contents

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Overview

A CRA letter campaign refers to a series of correspondence from the Canada Revenue Agency (CRA) targeting specific taxpayers or industries to ensure compliance with tax laws. These campaigns often focus on particular areas of concern, such as unreported income, specific deductions, or international transactions.

Understanding the nature of these letters and how to respond appropriately is crucial for businesses and individuals to avoid penalties and maintain good standing with tax authorities.

  • Purpose: CRA letter campaigns aim to educate taxpayers, encourage voluntary compliance, and identify non-compliance through targeted inquiries. They can range from simple requests for clarification to more detailed audits.
  • Types of Letters: You might receive various types of letters, including requests for information, pre-assessment review letters, or audit notifications, each requiring a specific and timely response to avoid further issues.
  • Responding Effectively: Proper and prompt responses are essential when dealing with CRA correspondence. Seeking professional guidance can help ensure accuracy and completeness, especially for complex inquiries or navigating CRA letters.

Received a CRA Letter? KWB Accountants Can Help Your Business

Every year CRA conducts reviews and audits to sample and educate tax payers on tax compliance, and 2016 will be no different.

CRA estimates that approximately 30,000 letters will be sent out across Canada this year. These letters will give you information about certain claims you have made on one or more of your recent income tax and benefit returns. The information in the letter is requesting you to evaluate if you comply with Canada’s tax laws and will give you the opportunity to request an adjustment if you find that items were incorrectly claimed in any of the past tax returns filed. The receipt of one of these letters does not imply that you will be subject to an audit although it may sound like that.

CRA states that the purpose of these letters is to help individuals and small business owners better understand their tax obligations, which they hope will increase future voluntary compliance, protect the government’s tax base, and utilize resources within the CRA more effectively.

If you are a business owner or an individual tax payer who has had consecutive business or rental losses or an employee who has employment expense on your personal tax return, you might be getting one of these letters.

The letters have already started coming and if you receive one, please give us a call and we can provide you with assistance.

If you would like more information or have any questions, feel free to contact us at 780.466.6204, or click here to send us an email.

Thanks to Richard Ouellette of KWB Chartered Accountants for providing this content.

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