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The tax assessment process

8 Mar

The tax assessment process

The process of assessing your income tax return by CRA needs a little explanation.  Insight is required to file returns electronically due to the number we prepare. When your return is filed electronically, only a summary is sent to CRA and none of the documents that you provide for the return preparation are sent with it.  Your T4, T5, T4A, RRSP and other slips are all filed with the CRA by your employer, bank, or other organisations like pension managers and such.  The CRA compare their files to the electronic return in the first instance to verify that the two are in agreement.  CRA basically believes in you for the other amounts, but sometimes they will send a letter to you asking you to send them copies of such things as donation receipts, medical expense receipts, union dues or proof of Northern Residence for that deduction.  Usually that will occur when there is a big change in one of those from year to year, or sometimes it is as a result of a decision by the CRA to have a look at certain things for a given year.  These letters will normally come later in the year following the tax filing year when this file processing is done.  If you do not provide the documents requested CRA will disallow the claim and send you a re-assessment – along with a bill!

If you have authorised Insight as your representative (by filling out and signing form 1013) we can send the requested documents to CRA on-line, saving you time and bother.  Insight stores all the documents you provide in the preparation stage to an electronic file, which allows us to get this job done for you quickly once we have received a copy of the request letter.  If you haven’t given us the documents, we will ask you to provide the ones that are necessary.  If you don’t tell us about the letter… see paragraph one!

In the past year, Canada Revenue has been working to allow more and more access to your tax return information and Notices of Assessment.  You can now choose an option on the T183 form – the one we send to you when your return is ready to be filed electronically –   to have your Notice of Assessment (NOA) made available to Insight almost immediately after your return is filed.  If you choose this option, you will not receive a paper copy of the NOA in the mail and can get it from Insight when you want it or need it.  Less paper is always good.  You can also set up your own email so CRA can tell you that your assessment is available.  In order to see it, you must have set up your own account with the CRA to allow you access to their records.  Go to the CRA site www.canada.ca, then click on the link to My Account for Individuals to find out more.

You can always call us for more information on any of the issues in this message.

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