The CRA employs a number of ways to select an income tax return for review. It could be by random selection or comparison of information returns to information received from third-party sources or types of deductions or credits claimed and an individuals review history.

It is important to know that whether you filed your tax return on paper or electronically, there is always fair chance that your return will be selected for review.

The CRA processes millions of tax returns a year and most of these are done without conducting a manual review of the information reported so that a Notice of Assessment and refund can be issued as quickly as possible. However, the CRA screens all returns through the computer system.

It is, therefore, important that we keep all our receipts and supporting documents for at least six years. We will never know when that review will come so it is always better to be prepared.

The CRA`s review program includes the following:

  • Pre-assessment Review Program. The reviews conducted during this program take place before a Notice of Assessment is issued. The peak period for this program is February to July.
  • Processing Review Program. The reviews for this program take place after the Notice of Assessment is issued. The peak period for this program is August to December.
  • Matching Program. In this program, information on an individual`s tax return is compared to the information provided by third-party sources. The peak period for this program is October to March.
  • Special Assessments Program. This program conducts a more in-depth review of the income tax returns to identify areas of non-compliance.

Source: CRA website