CRA Pressure?
CRA pressure? What a proposal letter for a corporation usually means
A CRA proposal letter on a corporate matter is not a casual FYI. It is CRA putting a proposed position on paper and inviting a response before an assessment issues. What you send next becomes part of the written record. This page is orientation: what the letter usually means, what not to send yet, and when a controlled consult fits.
Pay less tax, get your life back. — via honest options and a situation that matches the facts.
Request a fit consult — short note (issue + deadline). Soft fit check first.
Live letter or complicated file? Outline the letter type and the date on it. We’ll confirm fit — usually within one business day.
What this letter usually is
General education for Canadian owner-managers. Not legal, tax, or accounting advice. Your letter’s wording and dates control.
Most corporate proposal letters sit between an information request and a notice of assessment. CRA has reviewed something — a year, a schedule, a related-party item, GST/HST — and is telling you the adjustment it proposes to make. You are being asked to comment, support, or explain before that position hardens into an assessment.
That is different from:
- a notice of assessment or reassessment, which creates a concrete CRA position and often starts a different clock (see corporate Notice of Assessment checklist and Notice of Objection);
- a bare information request, which asks for documents without stating a full proposed adjustment;
- a collections notice on an unpaid balance — a different pressure path (see the payment-arrangement options map when that is live).
You do not need a perfect legal label on day one. You need a working label for the folder: “Proposal — 2023 T2 — shareholder loan” or “Proposal — GST Q2.” Wrong labels make wrong replies.
First-hour habits that still apply: CRA letter first steps. Broader response-path work: CRA representation.
What not to send yet
The expensive early mistakes are almost always about volume and theory — not about “not caring enough.”
- Do not send a narrative without exhibits. A long letter explaining how hard the year was, without invoices, contracts, or bank trails mapped to CRA’s points, expands the conversation without proving yours.
- Do not dump the cloud folder. Unlabelled ZIP dumps invite new questions. Match CRA’s numbered asks (or proposed adjustments) to labelled exhibits.
- Do not invent fixes in the reply. “We’ll refile,” “we’ll recharacterize,” or “treat it as a dividend” before the facts and authority trail exist can lock you into a story the records cannot support.
- Do not phone CRA from memory. Incomplete verbal notes become mismatched stories later. If you call, have the letter and account details in front of you and log what was said.
- Do not “clean up” source records after the letter arrives. Preserve what exists. Document gaps honestly. Altering the trail after CRA writes is how files get worse.
Silence for a few hours while you assemble is not the same as ignoring the letter. The clock still matters — see below — but panic-speed replies are not a strategy.
Clock / deadlines
Find every date on the letter. Circle the reply-by date. Note any “respond within X days” language. Put it in the calendar the corporation actually uses — not only in your head.
Do not start the count from the afternoon you opened My Business Account or the day a PDF was forwarded. Work from the dates CRA printed.
A proposal reply date is not the same as a later Notice of Objection window. Mixing those clocks is a common way to miss the one that matters after an assessment issues. If two program accounts or two years are in play, calendar each.
If no date is stated, write that down and treat the situation as time-sensitive until you know otherwise. Extensions are not automatic.
Documents to gather
Gather against the letter — not against your anxiety.
- The letter, complete. Every page, schedules, covering notes. Portal PDF and paper original if you have both.
- The filed return and working papers for the year(s) and program named. What you reported is the baseline. Memory is not.
- A mismatch sheet. Item by item: what CRA proposes, what you filed, evidence on hand, status (have / partial / missing).
- Source documents mapped to each disputed item. Invoices, contracts, bank statements, ledgers, resolutions where characterization matters. Label exhibits. List gaps honestly.
- Prior CRA correspondence on the same issue. Earlier info requests and replies. Contradicting a letter you already sent is expensive.
Stop when each proposed adjustment has a document or a named gap. That package is what a careful reply — or a decision to hold pending more work — should stand on.
When a consult fits
Some proposal letters are narrow and the records are clean. Others hit multi-year issues, related companies, thin working papers, a mismatch that does not match the return, or a deadline measured in days. Those files benefit from a structured read before anything goes on the record.
Fit filter for this lane: live letter or complicated file. Help means process quality — clear facts, coherent exhibits, consistent explanations — not a fixed CRA conclusion. How CRA concludes a proposal or later assessment depends on the matter.
Full response-path work sits under CRA representation. If an assessment has already issued and the objection clock is live, start at Notice of Objection. Services hub: services.
Quick answers
Is a proposal the same as an assessment?
Usually no. A proposal invites comment before CRA assesses. An assessment creates a concrete position. Read your letter; do not assume the labels from a friend’s file.
Should I reply the same day?
Deadlines matter more than speed-for-its-own-sake. A labelled, complete response to what was asked usually beats a same-day dump of unrelated files.
What if I can’t find a document CRA points at?
Record the gap on the mismatch sheet. Keep searching primary sources. Don’t invent a replacement. How you describe a material gap is file-specific.
Is this legal or tax advice?
No. Education only. Your letter and facts control. Your facts and file control.
CRA Chasing You?
Request a fit consult — short note (issue + deadline). Soft fit check first.
Outline the letter type, the date on it, and your deadline. We’ll confirm fit and next steps — usually within one business day. Live letter / complicated file. Full CRA lane: CRA representation. Or use contact.