A Notice of Reassessment (NORA) from the CRA looks similar to the Notice of Assessment you receive after filing your tax return. However, if you receive a Notice of Reassessment, it means the CRA has gone back to further review your tax return and wants more information about what you reported; or they simply made their decision and want more taxes to be paid.

Under the Income Tax Act, the CRA is allowed to go back and reassess tax returns from previous years, not just the most recent.

Why would CRA issue a Notice of Reassessment?

In some cases, the CRA conducts random reviews to ensure tax returns are accurate and to ensure that you do not owe more in taxes.

In other cases, the CRA may ‘red flag’ your return. This can happen for many reasons, such as:

• CRA believes that you may not have reported all your income
• you have asked for a refund based on business losses
• CRA disallowed deductions or credits claimed on your return
• CRA received new information after you filed your return that affects your return
• your situation is different from most others
• you were reassessed in other years and CRA collected more taxes at that time

Any of these factors may result in you owing additional taxes. In rare cases,  CRA may determine that you are entitled to a refund.

What to do if you receive a Notice of Reassessment?

It is important that you do not ignore this notice because you only have 90 days to dispute it.  It is important to review the assessment thoroughly and make sure you understand it. If you made a mistake and you agree that you owe more in taxes, it is advisable to pay the outstanding amount by the deadline to avoid owing interest and penalties.

Reassessments by the CRA can be, and are often conducted, without access to the taxpayer’s reference documents, such as receipts, invoices, leases, etc. Therefore, you may have the documents to show that the CRA decision was wrong, or you may believe the CRA has made an error for other reasons. In such cases, you can file a Notice of Objection (Form T400A), within 90 days of the date stated on the NORA.

Remember, if the CRA finds that you owe more in taxes, and your objection fails, not only will you have to pay the additional taxes related to the tax year in question, your file will also be more likely to be ‘red flagged’ and CRA may continue to review other tax years (past, current and future). Therefore, depending on the amount in question, it may be a good idea to hire an accountant or a lawyer to help with your objection.

Get help

For advice and assistance with tax planning, a CRA tax dispute, or other tax issues, contact KPK Law.

Personal and business tax issues are vast and complicated. To get help, ask a lawyer now.

								
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