CRA Audit Readiness Checklist

A CRA audit letter is unsettling, but a measured, organised response usually produces a far better result than improvisation. This checklist walks through what to gather, what to do, what to avoid, and the deadlines you cannot afford to miss. Work through the phases in order — the choices you make in the first two weeks tend to shape the entire file.

Understand what kind of review you are facing

Not every CRA contact is a full audit, and the right response depends on the type. Before you do anything else, identify which of these you have received.

• A processing review or matching letter — the CRA is asking you to support a single line item (a deduction, a credit, a slip mismatch). These are routine and usually resolved by sending the requested receipts.
• A desk audit — a more detailed review conducted by correspondence, often covering several items on one return.
• A field audit — the CRA examines books and records in depth, sometimes on site, and may review multiple years and related entities.
• A net-worth or indirect audit — used where the CRA believes records are inadequate; it estimates income from changes in assets and lifestyle rather than from the books. These carry a higher stakes profile and warrant early legal advice. See net-worth audits and indirect income assessments.

Knowing the type tells you how much is genuinely in scope and how seriously to escalate. A single-slip review and a multi-year field audit call for very different responses.

As soon as you receive the audit letter

The opening days set the tone. The goal here is to understand the scope, protect your position, and avoid volunteering more than is asked.

• Read the letter carefully and note the tax years, entities, and issues the CRA has identified. An audit of one year and one issue is very different from a multi-year review.
• Record the response deadline and any extension instructions. Most initial requests give a fixed window — diarise it immediately.
• Identify the auditor's name and contact details and confirm the file/reference number for all future correspondence.
• Do not send documents or answer substantive questions before you have reviewed what is being asked and what you actually have.
• Consider whether the matter is large, multi-year, or touches potential unreported income — if so, get tax-lawyer advice before responding (see "When to involve a tax lawyer" below).
• Stop any informal phone "chats" until you have a plan. Casual conversations create a record you cannot easily walk back.

Documents to gather

The CRA generally asks for records that support the figures on your return. Pull them together in an organised package rather than handing over a shoebox. Provide what is requested — no more, no less.

• Filed tax returns for the years under audit (T1, T2, T3, or GST/HST returns as applicable).
• Financial statements, general ledger, trial balance, and bank reconciliations.
• Bank statements for all accounts (personal and business) covering the audit period.
• Invoices, receipts, and contracts supporting income and the expenses claimed.
• Payroll records and source-deduction remittances, if employees are involved.
• Vehicle and home-office logs where those deductions were claimed.
• Loan documents, shareholder-loan records, and any related-party transaction support.
• For GST/HST files: input-tax-credit documentation that meets the prescribed information requirements.

Do's during the audit

Cooperation is expected and usually helpful — but cooperation does not mean surrendering control of the process.

• Respond by the deadline, or request an extension in writing before the deadline passes.
• Keep a written log of every request, every document provided, and every conversation (date, person, substance).
• Answer the specific question asked, accurately and concisely.
• Route documents through a single point of contact so nothing is sent twice or inconsistently.
• Keep copies of everything you provide to the CRA.

Don'ts during the audit

• Do not guess. If you are unsure, say you will confirm and follow up.
• Do not hand over original documents — provide copies.
• Do not volunteer records or commentary outside the scope of the request.
• Do not alter, backdate, or "tidy up" records. Reconstructing missing records is acceptable; fabricating them is not.
• Do not ignore the file. Non-response invites an arbitrary assessment based on the CRA's own assumptions.
• Do not assume a friendly auditor is on your side. Courtesy is welcome, but the auditor's role is to assess tax correctly, not to minimise yours.

Communicating with the auditor

How you manage the relationship affects how the file proceeds. The aim is to be cooperative, organised, and disciplined about scope.

• Confirm requests and responses in writing wherever possible, so there is a clear record of what was asked and what was provided.
• Ask the auditor to clarify the scope and the specific concern behind a request before you respond — broad fishing requests can often be narrowed.
• Provide an organised index with any document package so the auditor can find what they need without rummaging through unrelated material.
• If you need more time, request an extension before the deadline and propose a realistic date rather than going silent.
• If representation is in place, direct the auditor to deal with your representative and avoid being drawn into off-the-cuff explanations.

Deadlines that matter

Tax disputes are governed by hard time limits. Missing one can permanently close a door.

• Information-request deadlines — respond on time or request an extension in writing.
• Proposal letter response — the CRA usually issues a proposal of adjustments before reassessing, giving you a window to respond with submissions and supporting documents. Use it.
• Notice of objection — 90 days. If you disagree with a reassessment, you generally have 90 days from the date on the notice to file a formal objection. For individuals and testamentary trusts there is a possible extension to one year plus 90 days, but the 90-day window is the safe target.
• Tax Court appeal — 90 days after the CRA confirms or varies the assessment at the objection stage.

When to involve a tax lawyer

Many routine audits are handled with an accountant. Certain signals, though, suggest legal advice early is the prudent move.

• The audit touches unreported income, undisclosed offshore assets, or possible gross-negligence penalties.
• The auditor raises the prospect of a referral to the Criminal Investigations Program, or the language shifts from "audit" toward "investigation".
• The amounts at stake are significant, the file spans multiple years, or several related entities are involved.
• You want communications protected by solicitor-client privilege — a protection available through a lawyer that does not attach to accountant work product in the same way.
• You are weighing whether a voluntary disclosure is still available, which depends on the CRA not yet having commenced enforcement action on the issue.

After the audit

The audit ends with either acceptance of your returns as filed or a reassessment. Your options diverge from there.

• Review the reassessment line by line against the proposal letter and your submissions.
• If you disagree, file a notice of objection within the 90-day window. Keep building the documentary record.
• Pay or arrange payment of undisputed amounts to limit interest, even while objecting to disputed amounts.
• Consider whether taxpayer relief for interest or penalties is appropriate where delay or hardship was beyond your control.
• Tighten your record-keeping going forward — a clean audit trail is your strongest protection against the next review.

For a deeper walk-through of how an audit unfolds, see our step-by-step CRA audit process guide and the audit representation service overview.

This checklist is general information, not legal advice. Tax rules change and every situation is different — confirm how these items apply to your circumstances with a qualified advisor before acting.