CRA foreign income audit — do I need an adviser, or can I do it alone?
Some of it, yes — and we will say so on the call if that is the honest answer. The parts that are worth paying for are the ones where a missed election, a missed deadline or an unverified threshold costs more than the fee: the response is built on documentation of the source of funds, the residency position and the treaty relief claimed, delivered in a form that matches the information the CRA holds.
What if I have already filed and got it wrong?
That is a common starting point. We re-derive the position, identify whether an amendment or a disclosure route is the right vehicle, and tell you which one preserves the relief that is still available. The order matters more than the speed.
How long will it take?
It depends on the documents rather than on us. Once the pack is complete most filings turn around inside a fortnight; anything that needs a certificate from a tax authority runs on that authority's timetable, which we tell you at the start rather than at the end.
Why is the CRA suddenly asking about my bank account in India?
Almost always because it has been told something. Foreign-income audits typically start from information the CRA already holds — account data exchanged by a foreign bank, an entry in a property registry, a slip issued abroad — rather than from a review of your return on its own. That shapes the whole response. The first useful question is not what you can explain, but what triggered the letter, because the answer decides which documents matter. A reply written without knowing that tends to address the wrong thing, and an explanation that does not line up with what the CRA is holding is worse than asking what is in issue.
How did the CRA find out about my foreign account?
Financial institutions in many countries report account holders to their own authority, which passes the data on to the country of residence. Property registries, foreign employers and foreign payers produce records of their own. None of that requires anyone to have reported you. It also means the CRA's picture may be partial or out of date — a balance without a source, an account number without a purpose. Establishing what has actually been received, before answering, is part of the work, because the shape of the reply should match the shape of the information held rather than volunteering a broader story.
Should I just send the CRA everything they have asked for?
Send what is asked for, once you understand what is being asked and why. A foreign-income enquiry is usually about three things: where the funds came from, whether you were resident here in the years concerned, and whether any treaty relief claimed is supported. Documents that answer those questions help you. Documents sent without a covering explanation, or an explanation sent without documents, tend to produce a second letter rather than a closed file. What causes real damage is an answer given quickly that a later document contradicts, because the file then has two versions of your history in it.
What if I cannot get old statements from a foreign bank?
It is a common position and it is not fatal. Where a bank will not go back far enough, the source of funds is usually reconstructed from the other side of each transaction: the sale deed, the employer's records, the estate papers, the remittance advice from the transferring institution, the counterparty's own confirmation. A documented chain assembled from several sources carries weight. Start early, because foreign institutions respond slowly and an audit timetable does not extend itself. Where a genuine gap remains, say so plainly in the response and show what was done to close it rather than filling it with an assumption.
Is money I transferred from my own overseas account taxable in Canada?
Moving your own money is not, in itself, the earning of income. The difficulty is evidential rather than conceptual: a deposit arriving here looks the same whatever it is, so unless the trail back to the original source exists, the receipt sits on the file unexplained. That is exactly the position an audit tests. What answers it is the chain — where the funds were earned or received, whether they were taxed at that point, when they were held abroad, and the instruction that moved them here. Assembling that chain is usually the bulk of the engagement.
What if my explanation does not match what the CRA already has?
Then the inconsistency becomes the issue, and it is a harder one than the original question. This is why the sequence matters. We establish what has been received about you, document the source of funds, the residency position and any treaty relief claimed, and then put a single account of the facts on the record, supported page by page. Where an earlier answer was given in haste and is wrong, correcting it deliberately, with the documents, is better than letting it stand and hoping the point is not returned to. It usually is returned to.
Do Canada and the United States share tax information?
Yes, through more than one channel. The treaty has an exchange-of-information article that supports both routine and on-request exchange. Separately, an intergovernmental agreement has Canadian financial institutions identify US-reportable accounts and report them to the CRA, which passes them to the IRS, with the reverse flow for Canadian residents. Most other country pairs use the Common Reporting Standard for the same purpose. See FATCA reporting.
What happens if I have not filed for several years?
Missed years are handled as one package, not one at a time, because the route chosen for the first year determines the relief available for the rest. Each country has a disclosure or relief programme with its own conditions, and entering the right one — before the authority contacts you — is usually what keeps penalties down. Filing quietly outside a programme forfeits that protection. See catching up on missed returns.
