HOW TO prepare for a CRA Review 

Givens LLP | October 21, 2025

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Running a small business in Canada comes with many responsibilities, and one of the most stressful part of it can be receiving a notice from the Canada Revenue Agency (CRA) for a review. While a review is not as extensive as a full audit, it still requires careful attention and timely action. The good news? With proper preparation, you can handle it smoothly and avoid unnecessary penalties or reassessments of tax.

What Is a CRA Review?

A CRA review is a routine check to verify the accuracy of specific items on your tax return such as deductions, credits, or income amounts. Unlike an audit, which examines your entire financial picture, a review usually focuses on one or two areas and is conducted through mail or online correspondence.

Tax returns are selected for review for a number of reasons:

  • The information on your return does not match the information received from third-party sources, such as T4 slips
  • The types of deductions or credits you claimed
  • Your compliance history, meaning, regular filings have been missed or payments on accounts are outstanding
  • Random selection

Why CRA Reviews Matter

Every year, the Canada Revenue Agency (CRA) carries out various review activities to encourage compliance with the tax laws it oversees. These reviews play a vital role in upholding the integrity of the Canadian tax system and reinforcing public trust in its fairness and effectiveness.

Even though reviews are less intrusive than audits, failing to respond properly can lead to reassessments, interest charges, or penalties. In some cases, a review can escalate into a full audit if the CRA finds inconsistencies or missing documentation.

Review programs also assist in taxpayer education by identifying common areas of misunderstanding.

Steps to Prepare for a CRA Review

1. Read the CRA Letter Carefully

Your review notice will specify: 

  • The tax year under review 
  • The items being questioned 
  • The deadline for submitting documents. Mark the deadline in your calendar immediately. Missing it can result in a reassessment of tax owing.  

2. Gather Supporting Documents

Provide only what the CRA requests, no more, no less. Depending on the type of review, common documents can include: 

  • Receipts or invoices for claimed expenses (e.g., meals, travel, home office) 
  • Donation receipts for charitable contributions 
  • T-slips (T4, T5, etc.) 
  • Bank statements or invoices for business income

3. Organize Your Records

Well-organized records make the process faster and reduce stress. Tips: 

  • Use folders labeled by tax year 
  • Keep digital copies in secure cloud storage 
  • Maintain a logbook for vehicle or home-office claims 

4. Respond Promptly and Professionally

Submit documents through CRA’s “Submit Documents” service in My Business Account for speed and security. If you need more time, call the CRA before the deadline to request an extension.  

5. Avoid Common Pitfalls

  • Incomplete records: Double-check that receipts match amounts claimed. 
  • Over-claiming deductions: Ensure claims are reasonable and eligible. 
  • Mixing personal and business expenses: Keep accounts separate. 

You should keep your income tax records for a minimum of 6 years. This includes any receipts or documents that would be necessary to support your claims.   

Proactive Tips to Stay Review-Ready 

  • Keep all tax records for at least six years. 
  • File returns and GST/HST and payroll remittances on time. 
  • Conduct self-audits annually to catch errors early. 
  • Use accounting software to track income and expenses accurately.  

Final Thoughts

A CRA review doesn’t have to be intimidating. With organized records, timely responses, and professional guidance when needed, you can navigate the process confidently and keep your business on track.

Sometimes seeking professional help can ease the burden, at Givens LLP we are here to help by turning a stressful and overwhelming experience into a more manageable one.

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