What Is Canada RIT? How to Handle a Tax Reassessment

A tax reassessment, often referred to as a “Canada RIT” in certain contexts, is an official communication from the Canada Revenue Agency (CRA) known as a Notice of Reassessment. This notice indicates the CRA has made changes to a previously filed and assessed tax return. Its primary purpose is to ensure accuracy of tax filings, reflecting the CRA’s ongoing review.

Understanding a Canada Tax Reassessment

A tax reassessment is the CRA’s process of reviewing and correcting a tax return after its initial assessment. This formal adjustment can result in a change to the amount of taxes owed, a refund due to the taxpayer, or a nil balance. A Notice of Reassessment effectively supersedes the original Notice of Assessment, becoming the new official record of a taxpayer’s obligations or entitlements. The CRA often initiates these reassessments by comparing information submitted by the taxpayer with data received from third parties, such as employers and financial institutions, to verify reported figures.

Reasons for a Canada Tax Reassessment

Several common scenarios can lead to the CRA issuing a tax reassessment.
Unreported income: This includes earnings from employment (T4 slips), investment income (T3 and T5 slips), foreign income, or other sources like cash payments or rental income not declared on the original return.
Incorrectly claimed deductions or credits: Examples include medical expenses, charitable donations, or business expenses where supporting documentation is insufficient or the claim is ineligible.
CRA review programs: These involve data matching initiatives that compare reported income and claims against third-party information, or through random checks.
Adjustments from formal audits or specific requests for information: These formalize the CRA’s findings.
Clerical or mathematical errors: These can be made by either the taxpayer or the CRA during the initial assessment process.

Responding to a Canada Tax Reassessment

Upon receiving a Notice of Reassessment, thoroughly review the notice and compare the changes made by the CRA against your original tax return and all supporting documents. Locate the “Explanation of Changes” section on the notice, which details the reasons for the adjustments.

If you agree with the reassessment, accept the changes. If a balance is owing, ensure payment is made by the specified due date to avoid interest charges. Payments can be made through online banking, via the CRA’s My Payment service, or through other accepted electronic methods.

If you disagree with the reassessment, you have the right to file a formal objection. This objection must be submitted within 90 days from the date printed on the Notice of Reassessment. Gather all relevant supporting documentation that substantiates your original claims or refutes the CRA’s adjustments.

You can file an objection online through your CRA My Account or Represent a Client portal, or by mail using Form T400A or a signed letter detailing your disagreement. After filing, the CRA will review your submission, potentially assigning an Appeals Officer to your case. Processing times may vary based on complexity.