How Far Back Can the CRA Audit You? What Canadians Need to Know

Table of Contents

1. Introduction
2. CRA Audit vs CRA Reassessment: Key Differences
3. Standard CRA Audit Time Limits
4. Exceptions That Allow the CRA to Go Back Further
5. How Far Back the CRA Can Audit Individuals
6. How Far Back the CRA Can Audit Businesses and Corporations
7. Record-Keeping Requirements Under CRA Rules
8. Common Situations That Extend CRA Audit Periods
9. What Happens During a CRA Audit
10. How to Protect Yourself During a CRA Audit
11. How BBA Tax Ottawa Can Help
12. Conclusion

1. Introduction

One of the most common and stressful questions Canadians ask is:
“How far back can the CRA audit me?”

The Canada Revenue Agency has the authority to review, reassess, and audit past tax returns—but those powers are not unlimited. Understanding CRA time limits, exceptions, and record-keeping rules is critical for protecting yourself from unexpected reassessments and penalties.

At BBA Tax Ottawa, we help individuals and businesses respond to CRA audits, prepare documentation, and limit exposure through professional representation.

2. CRA Audit vs CRA Reassessment: Key Differences

Although often used interchangeably, an audit and a reassessment are not the same.

• CRA Audit: A detailed review of income, deductions, expenses, and documentation.
• CRA Reassessment: A change made by CRA to a previously filed tax return, often following an audit or review.

A reassessment can occur years after a return was filed, depending on circumstances.

3. Standard CRA Audit Time Limits

Under normal circumstances, the CRA can reassess tax returns within a defined period known as the normal reassessment period.

Normal Reassessment Period:

• Individuals: 3 years from the date of the original Notice of Assessment
• Canadian-controlled private corporations (CCPCs): 3 years
• Other corporations: 4 years

Within this period, the CRA can reassess without needing special justification.

4. Exceptions That Allow the CRA to Go Back Further

The CRA can go beyond the normal reassessment period if it believes there has been:

• Misrepresentation
• Negligence or carelessness
• False statements
• Tax evasion
• Failure to report income

In these situations, the CRA may reassess indefinitely, with no time limit.

5. How Far Back the CRA Can Audit Individuals

For most individuals:

• CRA can audit up to 3 years under normal circumstances
• If income was omitted or incorrectly reported, CRA may reassess beyond 3 years

Examples include:

• Unreported investment income
• Foreign income not disclosed
• Incorrect deduction claims

6. How Far Back the CRA Can Audit Businesses and Corporations

Businesses face higher audit exposure.

The CRA may review:

• Corporate income (T2 returns)
• GST/HST filings
• Payroll remittances
• Shareholder transactions

In cases involving:

• Unreported sales
• Improper expense deductions
• GST/HST errors

The CRA may audit many years back, especially if patterns are identified.

7. Record-Keeping Requirements Under CRA Rules

The CRA requires taxpayers to keep records for:

• At least 6 years from the end of the tax year
• Records must be complete and accessible
• Electronic records must be readable and reproducible

Failure to maintain records can result in:

• Denied deductions
• Estimated reassessments
• Penalties

8. Common Situations That Extend CRA Audit Periods

The CRA may extend audits when it detects:

• Repeated losses
• High expense-to-income ratios
• Significant changes year-to-year
• GST/HST discrepancies
• Foreign property reporting (T1135)

These cases often trigger deeper, multi-year audits.

9. What Happens During a CRA Audit

A CRA audit typically involves:

1. Written notification
2. Request for documents
3. Review period (often weeks or months)
4. Proposed adjustments
5. Final reassessment

You have the right to:

• Professional representation
• Clarification of requests
• Objection to reassessments

10. How to Protect Yourself During a CRA Audit

To reduce risk:

• Respond promptly and professionally
• Provide only requested documents
• Avoid speculation or verbal explanations
• Work with a qualified tax accountant

Early involvement of a professional often limits exposure.

11. How BBA Tax Ottawa Can Help

BBA Tax provides:

• CRA audit representation
• Review and response management
• Document preparation
• Objection and appeal support
• Ongoing compliance planning

Our Ottawa accountants communicate directly with CRA on your behalf.

12. Conclusion

The CRA generally has three to four years to audit or reassess—but that window can extend indefinitely when errors or omissions are found. Understanding your rights, record-keeping obligations, and audit exposure is essential.

If you receive CRA correspondence or are concerned about prior filings, BBA Tax Ottawa can provide professional guidance and protection.

📞 Contact BBA Tax today for CRA audit support and peace of mind.