Notice of assessment (NOA)
A notice of assessment is the CRA’s notice, sent after it examines a return, of the tax, interest and penalties assessed for the year, if any. Under the Income Tax Act, its date starts the objection period in subsection 165(1) and, for an original notice, the normal reassessment period in subsection 152(3.1).
Under subsections 152(1) and (2) of the Income Tax Act, the Minister examines a taxpayer’s return of income, assesses the tax, interest and penalties, if any, and sends a notice of assessment. The CRA’s IC75-7 says the CRA must issue either a notice of assessment or a notice that no tax is payable.
Why it comes up in due diligence
A notice shows what the CRA assessed, which can differ from what the business filed. Ask for the notice for each year of returns under review and compare it with the return and the financial statements. The answer on why buyers want three years of tax returns explains the wider review.
Periods that run from it
- Subsection 165(1) of the Income Tax Act, as IC75-7 describes it, sets the deadline for a corporation’s notice of objection at 90 days after the day the notice of assessment is sent; individuals and graduated rate estates can have a later date
- Subsection 152(3.1) counts the normal reassessment period from the earlier of the original notice of assessment and any original notification that no tax is payable
Sources
This definition is checked against primary sources. Links were last confirmed on the dates shown.
- 01Government of CanadaGovernmentIncome Tax Act, R.S.C. 1985, c. 1 (5th Supp.)
- 02Canada Revenue AgencyGovernmentReassessment of a Return of Income
- 03Canada Revenue AgencyGovernmentWhen we reassess your T2 return
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