An envelope from the Canada Revenue Agency lands in your mailbox. Your stomach drops. We see this reaction every week at Finsight Accounting, and the truth is most CRA letters are routine notifications that require nothing more than a quick review. A smaller number need a careful response within a strict deadline, and a few are serious enough that you should contact a CPA the same day you open them. This guide walks you through how to identify which category your letter belongs to and exactly what to do next.
Step 1: Confirm the Letter Is Genuine
CRA scams are common in Calgary. A genuine CRA letter arrives by Canada Post on official letterhead, references your tax account, includes a case or reference number, and never asks for payment by gift cards, cryptocurrency, or e-transfer. If you receive a call, email, or text claiming to be CRA and demanding immediate payment, it is a scam. CRA never threatens immediate arrest, deportation, or police action over the phone. When in doubt, log into your CRA My Account at canada.ca/my-cra-account and check whether any correspondence has been posted to your file. If nothing is there, the letter or call is not legitimate.
Step 2: Identify Which Type of Letter You Received
CRA sends seven main categories of letters to individual and corporate taxpayers. Each has a different urgency level and different response requirements. The letter type appears at the top of the page, usually in bold. Knowing which type you have determines what happens next.
Type 1: Notice of Assessment (NOA)
Most common. Sent after CRA processes your T1 or T2 return. The NOA confirms your reported income, calculates your refund or balance owing, and shows your unused RRSP room or tuition credits. An NOA is not an audit notice. It is simply CRA telling you they have processed your return. Action required: review the figures against your filed return. If everything matches, file the NOA with your tax records. If you owe a balance, pay by the deadline shown to avoid interest. If you see a refund, it will be deposited or mailed within a few weeks.
Type 2: Notice of Reassessment
CRA has reviewed your previously filed return and changed something. Common reasons include a slip you forgot (T4, T5, T3 from an issuer that reported directly to CRA), a deduction CRA disallowed, or a recalculation of credits. Action required: read carefully. If you agree with the change, pay any balance owing by the deadline. If you disagree, you have 90 days from the date on the reassessment to file a Notice of Objection. Missing this deadline forfeits your right to dispute the change without a costly application for an extension.
Type 3: Request for Information
CRA wants documentation to verify something you reported. Examples: receipts for medical expenses, charitable donation records, a rental property's expense breakdown, business mileage logs, or proof of foreign income. This is not yet an audit, but how you respond determines whether it becomes one. Action required: gather the requested documents and respond by the deadline (usually 30 days). Send organized, labelled copies. Never send originals. If you cannot locate a document, contact CRA before the deadline to request an extension. Ignoring this letter often triggers a full audit.
Type 4: Pre-Assessment or Post-Assessment Review
CRA is reviewing your return either before issuing the NOA (pre-assessment) or after (post-assessment). These reviews target specific deduction categories CRA has flagged for closer examination, such as employment expenses, moving expenses, child care, or tuition. The letter will identify which deduction is under review. Action required: respond within the 30-day deadline with supporting receipts and documentation. Pre-assessment reviews delay your refund until the review concludes. Post-assessment reviews may result in a reassessment if your documentation is insufficient.
Type 5: Audit Notification
CRA is conducting a formal audit of one or more tax years. The letter identifies the auditor, the years under review, and the records they will examine. There are two main audit types: a desk audit (you mail or upload documents) and a field audit (the auditor visits your home or business to review records on site). Action required: contact a CPA the same day. An audit handled properly typically resolves in months. An audit handled poorly can take a year or more, result in costly reassessments, and trigger reviews of other tax years. Do not respond to an audit letter on your own. The auditor is a CRA employee whose job is to assess additional tax. A CPA represents your interests.
Type 6: Demand to File
CRA believes you should have filed a return for a specific year but did not. The letter sets a deadline (often 90 days) to file the missing return. Action required: file the missing return by the deadline. Failure to file results in CRA preparing an arbitrary assessment based on their estimate of your income, which is almost always higher than your actual liability. Penalties for late filing apply, including a 5% penalty plus 1% per month for up to 12 months, increasing to 10% plus 2% per month for repeat late filers. If the missing return is multiple years old, consider whether the Voluntary Disclosures Program (VDP) is appropriate before the Demand to File arrives, as VDP relief is unavailable once CRA contacts you.
Type 7: Collection Notice
You have an outstanding balance owing and CRA is initiating collection action. The letter may threaten wage garnishment, freezing of your bank accounts, or registering a lien against your property. Action required: contact a CPA immediately. Options include paying the balance in full, negotiating a payment arrangement with CRA, or requesting taxpayer relief if extraordinary circumstances prevented payment. Collection action moves quickly, and you have rights at each stage that a CPA can help you exercise.
Step 3: Note the Deadline
Almost every CRA letter has a deadline, and the consequences of missing it are usually worse than the underlying issue. Mark the deadline on your calendar with at least a one-week buffer for preparing your response. If you cannot meet the deadline, contact CRA in writing before the deadline to request an extension. Verbal extension requests are not recorded. Always communicate in writing for any deadline-sensitive matter.
Step 4: Decide Whether You Need a CPA
Routine NOAs and simple Requests for Information can usually be handled on your own. Audit notifications, demand letters, large reassessments, collection notices, and any letter where you disagree with CRA's position warrant professional help. The cost of a CPA represented response is almost always smaller than the cost of an incorrectly handled CRA matter. At Finsight Accounting we offer free 15-minute calls for Calgary residents who have received a CRA letter and want a quick assessment of whether they need representation.
What Not to Do
Do not ignore the letter. Deadlines do not extend on their own. Do not call CRA without documentation in front of you. Anything you say is recorded against your file. Do not send originals of any documents. Do not pay an amount you disagree with just to make the issue go away. Do not respond emotionally or angrily, even if you believe CRA is wrong. The path to a good outcome is calm, organized, and timely.
Frequently Asked Questions
Finsight Accounting CPA
This article was prepared by the CPA team at Finsight Accounting Professional Corporation, a licensed CPA firm based in Calgary, AB. Content is for general information purposes only and does not constitute professional tax advice. Consult a CPA for advice specific to your situation.