Hello,
I have received a review letter from CRA and while I am preparing my receipts, I found employment expenses receipts that I missed to include in my initial T777 filing and I found some duplicate employment expenses receipts that I used twice in my filing.
Shall I correct my calculations and send corrected T777 with all receipts, or just send all my receipts and not to change T777 and just send the same filed T777 and CRA will correct it.
Will CRA really go through each receipt and make sure it is was added to my T777 ? Shall I rely on them to correct it?
In situations like these where mistakes need correcting and/or receipts need to be added or removed, you can’t always rely on CRA agents to adjust your returns correctly. My practice has been to clearly document the corrections in my cover letter and request CRA make the adjustments as per the attached T1-Adjustment form (T1-ADJ) included with all the other documentation requested by CRA. I have never had an issue doing it this way, and the CRA agents will normally adjust the return matching my attached T1-Adj form.
Clarity is important. I had a case this year where CRA reviewed one of my client’s moving expenses, as they almost always do. The move was made in August 2022 to allow time to settle in, and employment at the new location began in December 2022. Only a small amount was claimed in 2022 matching December’s income with the new employer, and the balance carried forward to the client’s 2023 tax return offset by the 2023 income from the new employer. The CRA agent reviewing the file was not paying attention to the move dates which overlapped two tax years even though this was clearly documented in my cover letter. The agent made two mistakes: they ignored the 2022 moving expense claim focusing instead only on the 2023 claim, but applied this claim to the 2022 income, not the 2023 income! Since 2022 income was only in December, they reassessed my client’s return allowing only the 2022 claim amount and carrying forward the balance to 2025’s return! They also based their mileage calculations on 2023’s mileage rates and not 2022’s mileage rates, thus decreasing the allowed expense claim!!!
I sent a second letter to CRA under the same CRA Reference number to spell out the errors made by the adjuster and request they be corrected. CRA adjusted the return to how it was originally filed, honouring my client’s full 2023 claim.