--- title: "CRA Says I Didn’t Report My Tips. What Now?" description: "Reply by the date in the letter, or call the number on it for more time. If you’re reassessed, you can object within 90 days or a year after the tax deadline." url: https://www.tipmaxapp.com/ca/answers/cra-says-i-didnt-report-my-tips language: en publisher: TipMax (Entermaurs Incorporated) date_published: 2026-09-23 last_verified: 2026-09-23 --- # The CRA sent me a letter saying I didn’t report my tips. What do I do? **Short answer:** **Don’t ignore it: reply by the date in the letter, or call the number printed on it if you need more time.** The CRA says all tips are taxable, and it calls a review a routine check, not an audit. Send your tip records. If it reassesses you, you owe the tax plus interest and possibly penalties, and you can object until 90 days after the notice or one year after the filing deadline, whichever is later. ## What to do this week 1. **Read the letter for three things:** the tax year, the reference number in the upper right corner, and the reply date. 2. **Pull your records for that year:** your T4 slips, pay stubs, and whatever you kept of your tips (a notebook, calendar, app log or bank deposits). 3. **Split your tips the CRA’s way.** Controlled tips, the ones your employer handled, are already in box 14 of your T4. Direct tips, the ones customers gave you, are the part you had to report yourself. 4. **Reply by the due date,** through My Account or by mail to the address in the letter, with the reference number. If a document doesn’t exist, send a written explanation instead. 5. **Running late? Call the number at the bottom of the letter** before the due date and say you need more time. **Not tax or legal advice.** If the amount is large or the letter mentions penalties, a tax professional can review it with you. ## Plain English ### What the letter usually is The CRA runs several kinds of reviews. In its **Matching Program**, “information on your return is compared to information provided by third-party sources, such as employers or financial institutions.” Its **Processing Review Program** looks at returns after the notice of assessment has gone out. The CRA’s own review page says a review “is not a tax audit” and is usually a routine check that what you reported is correct. ### What the CRA says about tips Its rule is short: “all tips and gratuities you receive are considered taxable income and must be reported on your income tax and benefit return.” Tips your employer controls, such as an employer-run pool or a service charge, are reported by your employer in box 14 of your T4 with tax, CPP and EI taken off. Direct tips, paid to you by customers, aren’t on any slip. You report those yourself as other employment income. See [Do servers pay tax on tips in Canada?](https://www.tipmaxapp.com/ca/answers/canada-tips-and-tax) for the full split. ### If the CRA reassesses you The CRA’s tips page says that if it reassesses your return and you haven’t declared all your tips, “you will have to pay what you owe, plus interest and possibly penalties.” The reassessment comes as a new notice of assessment. ### Disagreeing: the Notice of Objection - **Call first.** The CRA says to call the number on your notice before objecting, and that many disputes are resolved that way. - **Deadline:** for most individuals, the later of one year after the filing deadline for that return, or 90 days after the date on the notice of assessment or reassessment. - **How:** in My Account (“Register my formal dispute”), on Form T400A mailed or faxed to the Chief of Appeals, or in a signed letter setting out the facts and your reasons. - **Collection:** the CRA normally holds off collecting the disputed amount until 90 days after it sends its decision on your objection. - **Already asked for an adjustment?** The CRA notes it may be faster to wait for that than to file an objection. ### Fixing past years on your own The CRA’s Voluntary Disclosures Program “grants relief on a case-by-case basis” to people who come forward to fix errors or omissions in their tax filings. The program changed on October 1, 2025. If other years have the same gap, ask the CRA whether it applies to you. ## Common mistakes - Not answering the letter. If you can’t make the reply date, call the number on the letter before it passes and ask for more time. - Reporting tips that are already in box 14 of your T4 a second time. - Rebuilding a year of cash tips from memory with nothing to back it up. - Missing the objection deadline because you were waiting to hear back by phone. ## Official sources - [CRA: Are you aware that all your tips and gratuities are taxable?](https://www.canada.ca/en/revenue-agency/campaigns/track-report-tips-gratuities/tips-gratuities-taxable.html) - [CRA: Tips received by employees (payroll)](https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/payroll/calculating-deductions/determining-tax-treatment/tips.html) - [CRA: Income tax review? You’ve got this!](https://www.canada.ca/en/revenue-agency/campaigns/income-tax-review.html) - [CRA: Types of reviews](https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/review-your-tax-return-cra/types-reviews.html) - [CRA: Responding to us](https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/review-your-tax-return-cra/responding-us.html) - [CRA: P148, Resolving your dispute: objection and appeal rights under the Income Tax Act](https://www.canada.ca/en/revenue-agency/services/forms-publications/publications/p148/p148-resolving-your-dispute-objection-appeal-rights-under-income-tax-act.html) - [CRA: Income tax objections decision tree](https://www.canada.ca/en/revenue-agency/services/about-canada-revenue-agency-cra/complaints-disputes/file-objection-cppei-appeal-minister/income-tax-decision-tree.html) - [CRA: Voluntary Disclosures Program overview](https://www.canada.ca/en/revenue-agency/programs/about-canada-revenue-agency-cra/voluntary-disclosures-program-overview.html) ## Last verified September 23, 2026. Checked the CRA tips campaign page, the CRA payroll page on tips, the CRA review pages (types of reviews, responding, the review campaign), publication P148, the objections decision tree and the Voluntary Disclosures Program overview. **Still open:** The CRA review pages don’t give a standard reply period; use the date in your letter. They also don’t say what happens if you never reply. Penalty amounts depend on the case and aren’t on these pages. ## Related - [Do servers pay tax on tips in Canada?](https://www.tipmaxapp.com/ca/answers/canada-tips-and-tax) - [How do I keep track of my tips?](https://www.tipmaxapp.com/us/answers/how-to-keep-track-of-tips) - [How do I prove my income as a server?](https://www.tipmaxapp.com/us/answers/how-to-prove-income-as-a-server) - [What benefits can servers get in Canada?](https://www.tipmaxapp.com/ca/answers/benefits-for-servers-canada) ## How TipMax helps with this When the CRA asks about your tips, a dated record kept through the year is the document you send back. TipMax is an iPhone app for servers and bartenders that tracks tips and tip-outs and turns a restaurant menu into study flashcards. - Log cash and card tips per shift in seconds. - Weekly, monthly, and pay-period totals. - Download all your data as a CSV any time. Download TipMax free: https://apps.apple.com/us/app/tipmax-study-track-earn/id6744850146 --- TipMax Answers explains public IRS and U.S. Department of Labor guidance in plain English for tipped workers. It is **not tax, legal, or accounting advice**. Federal rules are a floor; your state may add its own tip rules. Confirm with IRS.gov, DOL.gov, your state labor agency, or a qualified professional. TipMax the app helps you track tips and tip-outs; it does not file your taxes or decide tip-pool disputes.