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CRA Income Tax Return Adjustments and Reassessments

Marc Chaput
Updating some calculations

We all make mistakes. Thankfully, taxpayers can make adjustments to a federal income tax return up to ten years after filing.  Here's what you need to know.

T1 adjustment request and TP-1 R-V request for an adjustment to an income tax return

If you forgot to make a claim or didn't know you could, you can submit a T1 Adjustment Request form. Submit online with the T183 form. Quebec applicants can also apply for adjustments up to ten years after filing, either online or by mail using the TP-1 R-V form.  Adjustment request forms ask for basic information such as amounts from original assessments, if any, and the new calculations. Applicants may append a detailed explanation of their reasons for requesting the adjustment if they desire.  Revenu Quebec prefers that applicants use the online service available on their website, unless:

  • The taxpayer cannot change the information online
  • The request concerns a tax year earlier than 2015
  • An income tax return is currently being assessed
  • A bankruptcy has taken place since the return in question was filed
  • The applicant filed a TP-22 or TP-25 form for business carried on in Canada outside Quebec, or Canadian non-Quebec residents doing business in Quebec
  • The applicant has in the past legally contested an income tax assessment.

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Supporting documents for tax adjustments

Receipts, information slips, and schedules can support tax adjustment claims. In the case of motor vehicle expense claims, the best evidence is a vehicle logbook. The more details it contains, the better. The CRA suggests that logbooks used to support motor vehicle expense claims contain descriptions of every work-related trip, including:

  • Date
  • Destination
  • Purpose
  • Mileage.

Take careful note of odometer readings at the beginning and end of each tax period. In case of switching vehicles, note the date and odometer readings. Keep a separate logbook for each vehicle used for business.

Why you need good records for the CRA

Records can help with a number of income tax disputes. In 2007, Tolson Hudson, a Newfoundland government worker, appealed his case in the Tax Court of Canada. He had kept meticulous track of the way he used his car and was able to bolster his case with evidence. A judge agreed with Hudson that a portion of his driving was for work rather than personal use. (Hudson v. The Queen, 2007 TCC 661)  Things didn't go as well for another Canadian. Entrepreneur Harold Peach appealed his income tax reassessments for 2009 and 2010 but came away disappointed. With no motor vehicle expenses logbook, he lost that portion of his lengthy claim. The judge found "of particular note" that Peach "produced no travel log for his business travel, nor did he testify that he kept one." (Peach v. The Queen, 2017 TCC 40)  It's a good idea to maintain records in order to support income tax claims, since you never know when you might be required to provide evidence, especially for adjustment requests. An easy-to-use mileage app like MileIQ can help make record keeping simple.

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