--- title: "CRA Arbitrary Assessment (Section 152(7)): How to Undo It" url: https://www.everstonecpa.com/blog/cra-arbitrary-assessment-notional description: "What an arbitrary or notional assessment is, why the CRA issues one, why filing the real return is still the fix, and the deadline. See how to undo it." type: guide updated: 2026-10-08 summary: "An arbitrary assessment is a return the CRA raises for a taxpayer who did not file, using subsection 152(7) of the Income Tax Act and the information the CRA already holds. It usually overstates tax because deductions are left out. Filing the real return is what replaces it." faq_count: 6 publisher: EverStone CPA Inc., a Chartered Professional Accountant firm registered with CPA British Columbia and CPA Alberta service_area: British Columbia, Alberta, Ontario and Manitoba language: en-CA contact: info@everstonecpa.com · https://www.everstonecpa.com/book-online --- [Home](https://www.everstonecpa.com/) [Blog](https://www.everstonecpa.com/blog) CRA Arbitrary (Notional) Assessment: How to Undo It CRA # The CRA filed a return for you *— undoing an arbitrary assessment* By EverStone CPA · Updated August 2026 · 7 min read **Quick answer:** An arbitrary assessment is a return the CRA raises for a taxpayer who did not file, using subsection 152(7) of the Income Tax Act and the information the CRA already holds. It usually overstates tax because deductions are left out. Filing the real return is what replaces it. Filing the real return is the remedy — not arguing the estimate. **Rather have a CPA handle this?** A CPA at EverStone replies with a straight answer and a fixed fee for your situation. [Get My Fixed Quote →](https://www.everstonecpa.com/book-online) ## Key takeaways - The CRA can assess tax without a return under subsection 152(7) of the Income Tax Act. - Arbitrary assessments run high because they omit deductions the CRA cannot see. - Filing the actual return is the remedy, not arguing about the estimate. - Once a demand to file is issued, filing is a legal requirement under subsection 150(2). 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. **Assessed for years you never filed?** We prepare the real returns to replace the CRA’s estimate, usually cutting the bill, with the catch-up quoted in writing first. See [our CRA support](https://www.everstonecpa.com/cra-review-and-audit-support), or [send us the notice](https://www.everstonecpa.com/book-online). [Get My Fixed Quote](https://www.everstonecpa.com/book-online) ## 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. Not sure how this applies to you? Every situation is different. Send an enquiry to a CPA and get a straight answer, plus a fixed quote before any work starts. [Send an Enquiry →](https://www.everstonecpa.com/book-online) [See fixed fees](https://www.everstonecpa.com/pricing) ## How to undo an arbitrary or notional assessment There is one real remedy, and it is not an argument. - **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. - **File every outstanding year, not just the assessed one.** Unfiled years keep the file open, keep penalties accruing and block most payment options. - **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](https://www.everstonecpa.com/behind-on-bookkeeping) job first. - **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](https://www.everstonecpa.com/blog/cra-collections-what-happens-next). **Filing beats objecting.** Objecting to an arbitrary assessment argues about an estimate. Filing the return removes the need for the estimate. If a formal dispute is still needed afterwards, [the objection route](https://www.everstonecpa.com/blog/cra-notice-of-objection-how-to-file) is there, but it runs on a deadline from the notice date, so do not let it lapse while you gather records. ## 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](https://www.everstonecpa.com/blog/voluntary-disclosures-program-canada-fixing-past-returns). ## 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](https://www.everstonecpa.com/blog/t2-deadline-penalties-canada). ## 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](https://www.everstonecpa.com/tax-services). Sources - [Canada Revenue Agency — Unfiled tax returns (Non-Filer Program)](https://www.canada.ca/en/revenue-agency/programs/about-canada-revenue-agency-cra/compliance/unfiled-tax-returns.html) - [Canada Revenue Agency — Debt collection at the CRA](https://www.canada.ca/en/revenue-agency/services/about-canada-revenue-agency-cra/when-you-money-collections-cra.html) - [CRA Guide P148 — Resolving your dispute: objection rights](https://www.canada.ca/en/revenue-agency/services/forms-publications/publications/p148/p148-resolving-your-dispute-objection-appeal-rights-under-income-tax-act.html) 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](https://www.everstonecpa.com/book-online) before acting on anything here. About this article **EverStone CPA** Prepared and reviewed by a CPA at EverStone CPA, serving businesses in BC, Alberta, Ontario and Manitoba. [About the firm →](https://www.everstonecpa.com/about) · [Send an enquiry →](https://www.everstonecpa.com/book-online) If a return is late, the [late-filing penalty calculator](https://www.everstonecpa.com/late-filing-penalty-calculator) estimates the penalty on a T1 or T2 balance. ### Keep reading [CRA collections: what happens next →](https://www.everstonecpa.com/blog/cra-collections-what-happens-next) [How to file a notice of objection →](https://www.everstonecpa.com/blog/cra-notice-of-objection-how-to-file) [The Voluntary Disclosures Program →](https://www.everstonecpa.com/blog/voluntary-disclosures-program-canada-fixing-past-returns) [The letter that precedes an arbitrary assessment →](https://www.everstonecpa.com/cra-letter-demand-to-file)[Ask a CPA one question, free →](https://www.everstonecpa.com/quick-question) FAQ ## Frequently asked questions **What is an arbitrary or notional assessment?** An assessment for a taxpayer required to file who did not. Under subsection 152(7) of the Income Tax Act, the CRA assesses tax without a return, from information it holds; the figures are its estimate, hence “notional”. **Why is the tax bill so much higher than it should be?** The estimate rests on income the CRA can see, such as employer and payer slips, while deductions depend on facts it lacks. Any estimated business expenses follow previous filings. So tax is overstated. **How do I get rid of an arbitrary assessment?** File the real return with your deductions and records; it replaces the estimate. File every outstanding year together, since unfiled years block most payment options. **Should I object to it instead of filing?** Filing is usually faster and better, since an objection argues about the estimate instead of replacing it. Note the notice date anyway, as the objection deadline runs from it. **Do I have to file once the CRA asks me to?** Yes. Once the CRA asks for a return, subsection 150(2) of the Income Tax Act requires it. The CRA can escalate to calls, visits and prosecution. **Can the CRA do this to a corporation?** Yes. The Non-Filer Program covers individuals, corporations and trusts. A corporation that stops filing its T2 returns can be assessed the same way, in addition to the corporate late-filing penalties that already apply to each unfiled year. ## Years behind and facing an assessment you never filed? Forward the notice of assessment and tell us which years are missing. A CPA replies by email within one business day with the plan and a fixed fee. [Get My Fixed Quote](https://www.everstonecpa.com/book-online)[Book a Paid Advice Call](https://www.everstonecpa.com/advice-call) ## Have a question about this? Ask free through [the quick-question form](https://www.everstonecpa.com/quick-question); a CPA replies within one business day. Need more? A 45-minute **Advice Call** is $225 plus GST, credited to your first invoice if you become a client within 60 days. Want us to take it on? [Send an enquiry](https://www.everstonecpa.com/book-online). [Ask a Free Question](https://www.everstonecpa.com/quick-question) [Book a Paid Advice Call](https://www.everstonecpa.com/advice-call) Email info@everstonecpa.com ★★★★★ “…have been completing my bookkeeping, taxes and financials for the last 2 years and they have been amazing. Thank you!” R. H. · Google review The way out of a notional assessment is to file the real return, which usually means [reconstructing the bookkeeping](https://www.everstonecpa.com/behind-on-bookkeeping) behind it first. **Run your own numbers with the free calculators:** [Payroll deduction calculator](https://www.everstonecpa.com/payroll-deduction-calculator) · [work out the GST/HST](https://www.everstonecpa.com/gst-hst-calculator) · [estimate your incorporation savings](https://www.everstonecpa.com/incorporation-calculator) [← CPP for incorporated owners: salary vs dividends](https://www.everstonecpa.com/blog/cpp-for-incorporated-business-owners-canada) [CRA audit triggers — what gets small businesses flagged →](https://www.everstonecpa.com/blog/cra-audit-triggers-small-business) --- Source: https://www.everstonecpa.com/blog/cra-arbitrary-assessment-notional Prices: https://www.everstonecpa.com/pricing · Contact: info@everstonecpa.com · https://www.everstonecpa.com/book-online