Keep your records to support your tax return

Ottawa, Ontario, January 25, 2008… Canadians who plan to file their tax returns electronically, or who do not submit information slips and receipts with their paper-filed return, should keep their tax records on hand in case they are contacted by the Canada Revenue Agency (CRA).

Once tax returns are filed, the CRA begins work to verify the income reported, as well as the credits and deductions claimed. These reviews are an important way the CRA ensures that Canadians are paying their taxes. Last year, the tax returns of approximately 2.7 million individuals were reviewed and an additional $700 million in taxes was assessed by the CRA.

Some initial reviews of deductions and credits are conducted when returns are filed, and before taxpayers receive their Notice of Assessment. However, the majority of reviews take place later in the year, as the CRA works to verify the information on an individual’s tax return and compare it with the information provided by other parties, such as an employer or a spouse or common-law partner.

During this review process, the CRA may contact taxpayers to request more information on income sources or dependants, and may ask for copies of receipts or information slips to support claims, including:

• medical expenses;
• charitable donations;
• childcare expenses;
• spousal or child support payments; and
• moving expenses.

Keeping your tax records on hand makes it easier to respond to these requests, and will help you explain your tax situation to the CRA if you do not agree with your reassessment.

Receiving a request for receipts or documentation does not mean you are being audited by the CRA. When an individual is selected for an audit, the CRA advises them that their tax situation is being reviewed and calls to arrange a meeting to begin the audit.

For more information about reviews of tax returns by the CRA, visit cra.gc.ca/reviews