Statute Of Limitations In Tax Audits

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When it comes to Tax Audits, most Tax Auditors — whether from the federal Canada Revenue Agency (“CRA”) or provincial counterparts auditing for tobacco, fuel or other provincial compliance matters —operate within a four-year general limitation period.

In this Tax Audits Series Report, we review the general statute of limitations rules applicable to tax audits, as well as the key exceptions that allow Tax Auditors to reassess beyond that four-year period.

The General Four-Year Limitation Period

Under both the Excise Tax Act ( “ETA”) and the Income Tax Act (“ITA”), the CRA is generally statute-barred from auditing or issuing further reassessments in respect of a year or reporting period more than four years in the past (exactly when the four year rule starts is a bit tricky and depends on the specific tax legislation at issue, but for the pusposes of this article, we will say it is about four years in the past).