CRA Audits in Ontario
Reviewed by the Commoner Law Editorial Team. Sourced from Canadian federal statutes and official sources. Provincial information reflects each province's own legislation and court rulings. Written in plain language for general understanding — this is educational content, not legal advice. Our editorial standards
What is this right?
The Canada Revenue Agency (CRA) has the power to audit any tax return under the Income Tax Act (Sections 231.1 and 231.2). An audit is a review of your records to make sure you reported your income and deductions correctly.
The Taxpayer Bill of Rights gives you 16 specific rights when dealing with the CRA. These include the right to be treated fairly and professionally, the right to complete and accurate information, and the right to be represented by someone you choose (Right #15).
An audit is not a criminal investigation. The auditor is checking your math and your records, not accusing you of a crime. You are required to keep your tax records for at least 6 years (Section 230).
If you disagree with the auditor's conclusions, you have the right to say so. You can request a meeting with a team leader, and if the CRA issues a reassessment you disagree with, you can file a Notice of Objection.
When does it apply?
This applies to every individual and business taxpayer in Canada.
- The CRA selects files for audit based on risk factors, random selection, industry-specific campaigns, or tips from third parties.
- Being audited does not mean you did something wrong — it is a routine part of the tax system.
What to Do If the CRA Is Auditing You in Canada
- Read the audit notification carefully — it will tell you which tax years and which items are being reviewed.
- Gather your records before the auditor's deadline. This includes receipts, bank statements, invoices, and contracts.
- Consider hiring a tax professional or representative — authorize them with Form T1013.
- Respond within the timelines given in the audit letter.
- If you disagree with the auditor's findings, put your disagreement in writing within 30 days.
- Ask to speak with the auditor's team leader if you cannot resolve the issue.
- File a Notice of Objection if the CRA issues a reassessment you believe is wrong.
What should you NOT do?
- Don't ignore the audit letter — the CRA will proceed without your input and you may lose your chance to explain.
- Don't destroy or hide records — this is a serious offence under the Income Tax Act.
- Don't send documents by regular email — use My Account, registered mail, or secure methods.
- Don't waive solicitor-client privilege without careful thought — talk to a lawyer first.
- Don't assume the auditor is always right — you have the right to challenge their conclusions.
How Ontario differs from federal law
Income tax audits are conducted by the Canada Revenue Agency (CRA), which administers both federal and Ontario income tax. Ontario does not conduct its own income tax audits — the CRA handles everything through a single return.
- Ontario residents pay both federal and Ontario personal income tax. Ontario's tax rates (set by the Income Tax Act, R.S.O. 1990, c. I.2) range from 5.05% on the first $51,446 of taxable income up to 13.16% on income over $220,000 (2024 brackets). The Ontario surtax adds additional tax for higher-income earners.
- The CRA audits your combined federal and Ontario return. If an audit results in additional tax owing, you may owe both additional federal and Ontario provincial tax, plus interest and possible penalties.
- Ontario also has a provincial sales tax (PST) component within the Harmonized Sales Tax (HST). Ontario HST is 13% (5% federal GST + 8% Ontario PST). HST audits of businesses are conducted by the CRA.
- You have the right to be represented by an accountant, lawyer, or other authorized representative during any CRA audit. You can authorize a representative using CRA Form T1013.
Additional Steps in Ontario
Keep all receipts and records for at least 6 years after filing. If you are audited, cooperate with the CRA but consider hiring a tax professional. If you disagree with the audit result, you can file a Notice of Objection within 90 days. Free tax clinics operated by community organizations across Ontario can help low-income individuals — find one at canada.ca/taxes-help.
Relevant Law: Income Tax Act, R.S.O. 1990, c. I.2 (Ontario personal income tax); Income Tax Act, R.S.C. 1985, c. 1 (5th Supp.) (federal); Excise Tax Act, R.S.C. 1985, c. E-15 (HST)
Common Questions
When does cra audits apply?
This applies to every individual and business taxpayer in Canada.The CRA selects files for audit based on risk factors, random selection, industry-specific campaigns, or tips from third parties.Being audited does not mean you did something wrong — it is a routine part of the tax system.
What should I do if the Canada Revenue Agency is auditing my tax return?
Read the audit notification carefully — it will tell you which tax years and which items are being reviewed.Gather your records before the auditor's deadline. This includes receipts, bank statements, invoices, and contracts.Consider hiring a tax professional or representative — authorize them with Form T1013.Respond within the timelines given in the audit letter.If you disagree with the auditor's findings, put your disagreement in writing within 30 days.Ask to speak with the auditor's team leader if you cannot resolve the issue.File a Notice of Objection if the CRA issues a reassessment you be...
What mistakes should I avoid with cra audits?
Don't ignore the audit letter — the CRA will proceed without your input and you may lose your chance to explain.Don't destroy or hide records — this is a serious offence under the Income Tax Act.Don't send documents by regular email — use My Account, registered mail, or secure methods.Don't waive solicitor-client privilege without careful thought — talk to a lawyer first.Don't assume the auditor is always right — you have the right to challenge their conclusions.
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