The CRA filed a return for you — undoing an arbitrary assessment

An assessment arrives for a year you never filed, with an enormous number. This is an arbitrary, or notional, assessment: an estimate, not a verdict, but fully collectible until you replace it.

How the CRA can assess a return you never filed

The Non-Filer Program targets people required to file who did not, where tax may be owing. It escalates deliberately: a letter or notice, then an officer’s call with a deadline, then a home or business visit. If returns still do not arrive, the CRA can assess under subsection 152(7) of the Income Tax Act without a return.

Once the CRA asks, you are legally required to file under subsection 150(2) of the Act. “I did not get around to it” becomes a compliance problem, and prosecution is possible in the right circumstances.

Why the number is so high

An arbitrary assessment uses what the CRA can see, and it sees income far better than expenses. Slips from employers, payers and financial institutions are on file; your subcontractor invoices, materials, vehicle and home office costs are not. Deductions are largely left out, and any estimated business expenses follow previous filings.

The result is a return that looks like gross income with very little taken off it. That is the arithmetic behind the scary number, not a penalty, just a missing side of the ledger.

How to undo an arbitrary or notional assessment

There is one real remedy, and it is not an argument.

1. File the actual return. A properly prepared return, with the deductions you are entitled to and the records to back them, replaces the CRA’s estimate. This is the whole game.
2. File every outstanding year, not just the assessed one. Unfiled years keep the file open, keep penalties accruing and block most payment options.
3. Rebuild the books before filing. A return filed on guesses invites a review of its own. If the records are behind, that is a catch-up bookkeeping job first.
4. Deal with the balance. Whatever survives after the real return is assessed is a debt, and it is already in collections. See what happens in CRA collections.

Before the CRA contacts you

If years are outstanding and the CRA has not called yet, the Voluntary Disclosures Program may reduce penalties for those who come forward. That door narrows once the agency starts asking, the strongest reason to act early. See our guide to the Voluntary Disclosures Program.

Corporations are not exempt

The Non-Filer Program covers individuals, corporations and trusts. A corporation that stops filing T2s faces the same assessment plus late-filing penalties; see T2 deadlines and late-filing penalties.

The bottom line

An arbitrary assessment is the CRA’s estimate without your return or your expenses, yet an enforceable debt while it stands. The fix is to file every open year properly, with records behind it. Getting current is part of our tax services.

This article is general information for Canadian business owners and is current as of July 2026. It is not tax, legal or accounting advice, and it does not create a client relationship. Tax rules change and your situation is unique, so please speak with a CPA before acting on anything here.

The way out of a notional assessment is to file the real return, which usually means reconstructing the bookkeeping behind it first.