Most Canadians treat a filed return as settled once the refund lands. Usually it is. However, Canadian tax law, through the Income Tax Act (ITA), keeps several doors open long after a file feels closed, and the Canada Revenue Agency walks through them more often than people expect. This guide shows you which years are locked, which stay live, and what to do when a reassessment arrives too late.
Key Takeaways
- The clock starts the day the CRA sends your original notice of assessment, not the day you file the return.
- Individuals, most trusts and CCPCs get three years. Most other corporations get four.
- Carrybacks and non-arm’s-length dealings with non-residents add three more years for that single issue.
- A year loses protection permanently through misrepresentation, a signed waiver, or a return you never filed.
- Keep records six years, which deliberately outlasts the ordinary window.
What a Statute-Barred Tax Year Means
A statute-barred year is one the CRA can no longer reassess. Subsection 152(4) of the ITA sets the default: the Minister may assess at any time, except that a reassessment made after your normal reassessment period stands only if a listed exception applies. Once that window shuts, the CRA’s ability to reassess a taxpayer’s tax payable for a given tax year ends.
Two clocks get confused here. Being statute-barred stops the CRA from changing what you owe. It does not stop collection of a balance already assessed, which runs on a separate ten-year limitation period. The GST/HST side keeps its own four-year clock, including for input tax credits.
The Normal Reassessment Period: Three Years or Four
Subsection 152(3.1) defines the normal reassessment period, which CRA letters sometimes call the standard reassessment period or simply the tax reassessment period, as ending three years after the earlier of two dates: the day the CRA sends the original notice of assessment, and the day it sends an original notification that no tax is payable for the year. For mutual fund trusts and non-CCPC corporation income tax returns, the reassessment period is four years instead.
| Taxpayer | Normal reassessment period |
|---|---|
| Individuals, including sole proprietors | 3 years |
| Trusts other than mutual fund trusts | 3 years |
| Canadian-controlled private corporations (CCPCs) | 3 years |
| Other corporations and mutual fund trusts | 4 years |
The start date trips up almost everyone. It is not your filing date. It is the sending date printed on your original notice of assessment. In our practice that one date decides more files than any technical argument, so we pull it first.
Say you filed your 2021 individual income tax return on 12 April 2022, and the CRA sent your notice of assessment on 5 May 2022. Your normal reassessment period closed on 5 May 2025, so a reassessment dated 20 June 2025 arrived out of time. Read the wording yourself in section 152 of the Income Tax Act.
When the Extended Reassessment Period Adds Three More Years
Paragraph 152(4)(b) adds three years to the end of the normal reassessment period for specific matters, two of which reach ordinary owner-managed businesses. Subparagraph (b)(i) covers a reassessment required because you carried a loss or a tax credit back from a later year. Subparagraph (b)(iii) covers a transaction involving you and a non-resident person you were not dealing with at arm’s length.
Crucially, subsection 152(4.01) fences that extension in. The CRA may only reassess amounts reasonably regarded as relating to the matter that opened the door. Suppose your CCPC posts a $180,000 loss in 2024 and carries $120,000 back to 2021. The carryback allows the CRA to reassess 2021 for that adjustment alone, and an auditor cannot use it to revisit your 2021 vehicle expenses.
When the CRA Can Reassess a Tax Year at Any Time
Aggressive tax avoidance schemes carry their own extension first: where a reportable or notifiable transaction under the mandatory disclosure rules goes unreported, the clock on that transaction does not start until the information return is filed. Beyond that, three situations strip a year of protection entirely, and the CRA may reassess at any time.
- Misrepresentation or fraud. Under subparagraph 152(4)(a)(i), a misrepresentation attributable to neglect, carelessness or wilful default, or outright tax fraud in filing the return or supplying information, leaves the year open indefinitely.
- A signed waiver. Subparagraph 152(4)(a)(ii) keeps a year open where you filed a waiver in prescribed form, Form T2029, before the window closed. You can revoke it, and under subsection 152(4.1) no reassessment can be issued more than six months after you file the notice of revocation.
- An unfiled return. No return means no original assessment, so the clock never starts. A year you never filed stays open forever, which is why catching up beats waiting to be found.
Marleau v. The King: What a Reassessment Case Says About Carelessness
The Tax Court of Canada’s decision in Marleau v. The King shows how narrow the misrepresentation door really is. The taxpayer faced tax reassessments spanning 1997 to 2010, every one beyond the normal window, and the CRA relied on misrepresentation to get there.
On unreported consulting income, the Court found carelessness. She earned the income personally, assumed her accountant was handling it, and never checked that the income amounts reported on her returns included it. Part of it was invoiced through a corporation her accountant had set up, and that corporation filed as inactive. Relying on a professional did not excuse her.
The offshore investment reassessments failed. The Court found no evidence that tax avoidance drove them, holding that chasing higher returns is a normal investment objective, so those later years stayed statute-barred. That split is the lesson: the CRA carries the burden of proving misrepresentation, and must discharge it year by year and issue by issue.
How to Spot an Out-of-Time Tax Assessment and Object to It
- Retrieve the original notice of assessment for the year and note its sending date.
- Add three years, or four for a corporation that is not a CCPC.
- Compare that deadline against the date on the new notice of reassessment, whether it reached you from the CRA by mail or in My Account.
- Identify which exception the CRA relies on, because auditors do not always name it.
- Preserve the point in writing, since a limitation argument raised late is harder to run.
Where the reassessment lands outside of the normal reassessment period, the CRA has to prove the misrepresentation. You do not have to prove you were careful. Press that reversal rather than conceding to a faster settlement. Deadlines are short, so review our notice of objection guide for the filing mechanics. If the audit is still open, professional CRA representation keeps the limitation issue on the table from the start.
Records to Keep After Your Income Tax Return Is Filed
The CRA requires you to keep records for six years from the end of the tax year they relate to. File late and the six years run from the filing date instead. The CRA’s guidance on how long to keep your income tax records sets out the exceptions.
Six years looks generous beside a three-year window, and that gap is deliberate. Extended and unlimited windows exist, and a taxpayer without documents loses by default. Hold anything touching a waiver, a carryback or a non-resident transaction until that window closes, and keep every notice of assessment or reassessment indefinitely; they are one page each and settle the date question instantly.
Frequently Asked Questions
Can the CRA audit more than 3 years back?
Yes. Being audited by the CRA can involve any year, but the law requires the CRA to issue your notice of reassessment inside the window unless an exception in subsection 152(4) applies. Handing over older records does not by itself reopen a closed year.
What is the CRA 10 year rule?
The ten-year figure covers two different things. Collections on an assessed debt run under a ten-year limitation period, and taxpayer relief applications for penalty or interest cancellation reach back ten calendar years. Neither extends the reassessment window.
What triggers a CRA reassessment years after filing?
Third-party data matching is the most common trigger, including T-slips, foreign account reporting and payment processor records. An audit of a related person, a partnership adjustment, or a carryback you claimed yourself also pulls older years back into view.
Do I have to sign a waiver if the CRA asks?
No. Form T2029 is voluntary, and refusing usually means the CRA reassesses on the information it already holds before the window closes. Whether signing helps depends on whether more time actually improves your position, so get advice first.
Is the GST/HST reassessment period the same?
No. Under subsection 298(1) of the Excise Tax Act, the CRA generally has four years from the later of the day the return was due and the day it was filed. Misrepresentation, fraud and waivers remove that limit, much as they do for income tax.
Does the reassessment period work the same way in Quebec?
Quebec residents and corporations also deal with Revenu Québec on provincial income tax, and it runs its own limitation clock separately from the CRA. Confirm both deadlines, because a federal year closing does not close the provincial one.
The Bottom Line
- Find your sending date first, then count three or four years from it.
- Treat carrybacks and non-arm’s-length non-resident dealings as a three-year extension on that issue only.
- Assume nothing is closed on an unfiled year, a signed waiver, or unreported income.
- Make the CRA prove the misrepresentation rather than proving your own diligence.
Limitation arguments turn on dates, documents and what an auditor can actually establish, and every file reads differently. If a reassessment has landed on a year you thought was finished, book a review with our team before you respond.
