How to Prepare for a CRA Review or Audit Without Stress

How to Prepare for a CRA Review or Audit — Without Stress

Getting a letter from the Canada Revenue Agency (CRA) that your tax return is being reviewed or audited can feel unsettling. But the good news? A CRA review or audit doesn’t always mean something is wrong. In many cases, it’s routine — and with proper preparation, you can handle it calmly and confidently.

At Excellence Accounting, we help individuals and businesses across Alberta navigate CRA reviews and audits with ease. Here’s a practical guide on how to prepare — and stay stress-free throughout the process.

What's the Difference Between a Review and an Audit?

Before we dive in, it’s helpful to understand the distinction:

• Review: A more common and less intensive process. The CRA may request receipts or documents to support a specific claim (e.g., medical expenses, employment expenses, or tuition credits).

• Audit: A more in-depth examination of your entire return, or even multiple years. This could involve financial records, bank statements, and business documentation.

Whether it's a review or an audit, the CRA's goal is to ensure the information reported matches the supporting documentation — not to penalize you unnecessarily.

Step 1: Read the CRA Letter Carefully

The CRA will typically contact you by mail. Here’s what to look for:

• The tax year(s) being reviewed

• The specific items or claims in question

• The documentation requested

• A deadline for your response

Don't panic. Take note of the deadline, and avoid ignoring the letter — delays can result in reassessments or denied claims.

Step 2: Gather the Requested Documents

Collect everything the CRA asks for — and nothing more unless they specifically request it. Examples include:

• Receipts (for childcare, donations, medical, etc.)

• T2200 and supporting expenses if you’re claiming home office or employment expenses

• Business income and expense records

• Bank statements or investment slips (e.g., T5s or T3s)

Tip: Make clean, legible copies or scanned versions of documents. Avoid sending originals unless asked.

Step 3: Organize Your Response Professionally

Presentation matters. A clear, well-organized response makes it easier for the CRA to verify your claims. We recommend:

• Grouping receipts or documents by category

• Including a cover letter summarizing what’s enclosed

• Labelling each document with a short explanation, if needed

This shows the CRA you’ve taken care to comply and may help resolve the review faster.

Step 4: Get Professional Support

If you’re unsure how to respond, don’t go it alone. As a CPA firm, we regularly assist clients with CRA correspondence and know how to address red flags proactively. In many cases, a qualified representative can:

• Communicate with the CRA on your behalf

• Help draft a proper response

• Identify and fix potential issues before they escalate

• Represent you in case of a full audit

Even if you prepared your taxes yourself, it’s worth consulting a tax professional when dealing with a review or audit.

Step 5: Learn from the Experience

A CRA review can be a great learning opportunity. Use it to evaluate:

• Your recordkeeping habits — Are receipts stored properly and retained for 6 years?

• Your deductions and claims — Are they reasonable and fully backed by documentation?

• Whether it’s time to upgrade — to using accounting software or professional bookkeeping support.

Being proactive now can reduce the risk of future reviews or penalties.

Final Thoughts: Stay Calm, Stay Compliant

A CRA review or audit doesn’t have to be scary. With a calm, organized approach — and help from a professional when needed — you can navigate the process smoothly and protect your financial well-being.

At Excellence Accounting, we support clients across Alberta with tax reviews, audit defense, and ongoing advisory. If you’ve received a CRA letter or just want peace of mind, reach out to us — we’re here to help.

Need help responding to the CRA?
📞 Call us at 825-438-5577
💻 Or book a free consultation at Book meeting.