CRA Demand to File Letter: What It Means for Your Unfiled Tax Returns – Corp Nil Filing Guide
TLDR: A CRA demand to file letter signals that the Canada Revenue Agency requires you to submit overdue tax returns, often related to past years of unfiled taxes. Corp Nil Filing specializes in handling CRA demand to file cases for $300, making it easier to resolve your tax issues and comply with Canadian tax requirements.
Quick Summary
A demand to file is a formal letter under subsection 150(2) of the Income Tax Act. It names the tax year or years the CRA wants, and it sets its own date for the return. That date, not the usual six-month due date, is the one to work to. A corporation that owed nothing still answers the letter by filing, and a nil return is a complete answer for a nil year.
- Read the year designated and the date in the letter first.
- A nil return answers the demand for a year with no activity.
- A demand can move a corporation onto the larger repeat-failure penalty.
- Keep the CRA confirmation once the return is transmitted.
Reading time: 28 minutes.
Table of Contents
The Numbers That Matter
This article covers Canada, with Ontario and Toronto context, and reflects CRA guidance current to 2026. It is written for owners of Canadian corporations — particularly inactive, dormant and holding companies — who have received a CRA demand to file a T2 return. CorpNilFiling is a department of Gondaliya CPA Professional Corporation, which performs compilation engagements under CSRS 4200 and does not offer audit or review engagements. This is educational information only and not tax or legal advice; where prosecution is raised, speak to a tax lawyer.
What Is a Demand to File Letter from the CRA
What Is a Demand to File Letter
The Letter
A demand to file letter from the Canada Revenue Agency (CRA) is a formal ask for a company to send in its T2 tax return. The CRA sends this letter when it thinks a company did not file its return like it should. This comes under Subsection 150(2) of the Income Tax Act. It tells you which year’s return you need to send and by when.
The letter also points out the legal rules that back up the request. You have to pay attention because ignoring it can cause fines or other problems with the CRA.
Definition of a Non-Filer and Criteria for Identification
A non-filer is a company that does not send in required tax returns, even though it has to. The CRA uses some signs to find these non-filers:
- The company misses filing its T2 return on time or not at all.
- The company has an active business number but no filed returns.
- The company had issues before with late or missing returns.
If you get called a non-filer, you could face penalties or get tax assessments without even filing.
Common Reasons for Receiving a Demand to File Notice in Canada
Here are some reasons why you might get a demand-to-file notice from the CRA:
- You never sent in past years’ tax returns.
- You thought you didn’t need to file because your business was inactive.
- Your address or contact info wasn’t updated, so you missed messages.
Knowing these reasons can help you avoid getting these letters in the future.
When You Are Required to File a Tax Return
According to subsection 150(2), every corporation must file its T2 corporate tax return each year. This rule applies even if your company did not make money or had no expenses that year.
You must:
- Report based on the years named in any letter you got.
- File by the deadlines stated in those letters.
Not filing on time can lead straight to fines and other penalties. So, it’s important to file every year, no matter what.
Overview of the Non-Filer Program and Its Objectives
The CRA’s Non-Filer Program works to get more companies to follow tax rules. It tries to:
- Make sure everyone files their returns on time.
- Spot companies that often don’t file so they can take steps before things get worse.
This program helps keep everyone honest and protects public money. If you understand how this works, you can better handle your filings and avoid trouble later on!
An owner who had moved twice received a demand for a numbered company that had never traded, after an earlier letter went to the old address. The year in the letter was answered with a nil return by the letter’s date, the mailing address was updated, and the remaining unfiled years followed. Figures changed for privacy.
Timeline and Process Following a Demand to File Letter
Timeline and Process After a Demand
The Deadline
When CRA sends a demand to file letter, the corporation must send its T2 tax return by the date on that letter. This deadline is set by subsection 150(2) of the Income Tax Act (ITA). It replaces the usual six-month period after year-end. Even if the company owes no tax, has no activity, or filed before, it must file again.
If the corporation misses this deadline, penalties apply under subsections 162(1) and 162(2). The repeat-failure penalty in 162(2) kicks in only if a demand was sent and a penalty was charged in any of the last three years. It charges 10% of unpaid tax plus 2% for each month up to twenty months. Otherwise, subsection 162(1) charges 5% plus 1% per month for up to twelve months on unpaid taxes.
Ignoring a demand is risky. CRA can charge fines under subsection 238(1). These fines go from $1,000 up to $25,000. Also, CRA can assess taxes without a return under subsection 152(7). So, corporations should always take demands seriously and file on time.
Key Stat: Repeat-failure penalty looks back three years; rates are percentages of unpaid tax [Income Tax Act: ss.150(2), 162(1), 162(2), 238(1),152(7)].
Initial Contact Methods Used by the CRA (Letter, Phone, In Person)
CRA usually starts by sending letters through mail about overdue T2 filings. These letters include names of CRA officers, their phone numbers, and mailing addresses for only that case.
If CRA needs to follow up or explain things before filing happens, officers may call using numbers linked to their offices. To check if a call is real:
- Ask for the caller’s name and employee number.
- Request their direct office phone number.
- Check these details yourself on official CRA websites or channels before sharing any info.
Sometimes CRA visits in person. This is rare but happens when they need to look at business records or do compliance checks.
CRA workers always show ID badges with their photo and name during visits or calls. You can ask to see these anytime.
Pro Tip: Don’t wait to file while you check contacts; use official sources fast instead [CRA Verification Procedures].
Purpose and Content of the Demand to File Letter under ITA Subsection 150(2)
A demand under ITA subsection 150(2) tells corporations with missing returns exactly which tax years need filing. The letter makes it clear: you must file by the date given in it. This date replaces normal deadlines completely.
Each part of the letter explains something different:
| Part | What It Says | What You Should Do |
|---|---|---|
| Year Designated | Lists which fiscal year(s) need filing | Get your T2 return(s) ready for those years |
| Date To File | Gives a firm due date unlike usual deadlines | Send nil or full returns by that date |
| Legal Authority Cited | Quotes ITA s.150(2) as legal reason | Know this is a legal obligation |
| Warning Lines | Shows penalties for not complying | Take urgency seriously |
| Contact Details | Provides officer’s name/address/phone | Use only this info for communication |
This helps make things clear about what law says and what’s expected from you without confusion.
Key Stat: A section 150(2) demand means you must respond no matter past filings [ITA s.150(2)].
What to Expect During Phone Contact from CRA Officers
If you get a call after a demand letter:
- Calls come from numbers matching those on your original notice.
- Officers talk only about missing filings; they don’t give legal advice.
- They don’t extend deadlines or negotiate over phone calls.
Keep your paperwork close but don’t wait to file because of calls. You still have to meet deadlines set in writing earlier.
Write down call dates, topics discussed, and agent info during calls for your records. But don’t think this alone changes what you owe or when you must file.
Protocols for In-Person Visits and Business-Related Inquiries
CRA visits happen if letters don’t work or more checking is needed about business matters tied to outstanding returns under section 150.(2).
When they visit:
- Officers show government ID badges right away.
- They look only at business records related to filing or clearing up any issues found before.
Corporations should cooperate but keep notes about visit dates and times. Taking pictures or copies is okay if local privacy laws allow (Ontario included).
These steps protect both sides and make sure things stay fair during enforcement after demands are sent.
Identification and Verification of CRA Representatives
Verifying CRA Representatives
Verify
When you get a CRA demand to file letter or a demand to file notice Canada, you need to be sure it’s really from the Canada Revenue Agency (CRA). This keeps your company safe from scams. It also helps you answer the letter the right way.
How to Identify Authorized CRA Employees in Person
If someone comes by and says they are from the CRA, they must show their ID. Here’s what to check:
- They should give you their full name, phone number, and mailing address.
- They must have a government photo ID that matches their name.
- Their phone number should start with 1-800 or match known CRA numbers.
- The mailing address on any letter should be the same as official CRA addresses on Canada.ca.
Don’t just trust caller ID or email names. Always check more.
Verification Procedures for Incoming Phone Calls Claiming to Be from the CRA
If someone calls about a CRA demand to file, don’t give out personal info right away. Instead:
- Ask for their full name, department, and a number to call back.
- Log into My Business Account online portal for business tax management at canada.ca/mybusinessaccount.
- Check there if you really have any outstanding demands or notices.
The portal shows all messages the CRA sent about your business taxes.
Steps to Take If You Doubt the Legitimacy of a CRA Contact
If you think a CRA demand to file letter isn’t real, do this:
- Know that real demands come as formal letters citing subsection 150(2) of the Income Tax Act.
- Don’t trust emails asking for your payment info or personal details—these may be scams.
- Visit Canada.ca/verify-cra-contact to check.
It’s okay to ask “Is this demand real?” Use official sites instead of caller claims alone.
Official CRA Contact Information and Resources for Verification
| Contact Method | Details |
|---|---|
| General Inquiries Phone | 1‑800‑959‑5525 |
| Business Enquiries Phone | 1‑800‑959‑7775 |
| Online Portal | My Business Account: canada.ca/mybusinessaccount |
| No public email; use secure portals | |
| Mailing Address | Check original letter and cross-check via Canada.ca |
Call or log in through these only. Don’t reply directly to unknown emails or calls.
Checking who contacts you about your corporate taxes stops fraud. It also helps you follow any CRA demand to file instructions fast. If you need help with nil T2 returns after getting such letters, Corp Nil Filing offers CPA-reviewed e-filing across Ontario and Canada.
Consequences of Non-Compliance and Unsuccessful Contact Attempts
Consequences of Non-Compliance
Consequences
Ignoring a CRA demand to file letter can cause big problems. The Canada Revenue Agency (CRA) has the power to make you file your taxes or face penalties. They can even assess your taxes without your return if you don’t respond. Knowing what happens helps you handle things right.
Actions Taken When Initial Contact Attempts Are Unsuccessful
If you don’t reply to the CRA demand to file letter, they start the non-filer process Canada rules. This means you get official CRA notices telling you to file by a deadline. This deadline comes from subsection 150(2) of the Income Tax Act (ITA).
If you keep ignoring these letters, penalties will kick in under section 162(2). That’s called the repeat-failure penalty. It hits if you had a failure-to-file penalty in any of the last three years before this demand.
Here’s how it works:
- You pay 10% of unpaid tax right away.
- Then 2% extra for each month up to 20 months.
- Penalties here are worse than normal late fees because they show repeated ignoring after being warned.
Legal Obligations to Provide Documents and Maintain Records per ITA Sections 230 and 231.1
The law says you must file your return when CRA demands it, under subsection 150(2). Even if you have nothing to report, filing nil returns is required.
You also have to keep records that back up your tax info. Sections 230 and 231.1 explain this well.
- Section 230 says keep books and documents for six years after the tax year ends.
- Section 231.1 lets CRA check your records during audits but doesn’t change filing deadlines.
So, once CRA sends a demand, it’s law that you send what they ask on time.
Tax Assessments Issued Under ITA Subsection 152(7) for Failure to File
If you don’t send a return after getting a demand, subsection 152(7) lets CRA assess your taxes using what info they have—this is called an assessment without return.
These assessments usually cost more because they don’t count credits or deductions you’d claim. Also, late filing penalties apply under subsection 162(1):
- That’s 5% of unpaid tax plus
- 1% for each full month up to 12 months.
Ignoring demands means losing control over how much tax you pay and paying more than needed.
Limitations of Assessments and Review After Filing Late Returns
You can still file late after a demand, but previous assessments won’t go away automatically. You can ask CRA to review them by objecting or appealing.
There’s also a voluntary disclosure program where you can fix things after missing deadlines. But this depends on when and how you comply—not everyone qualifies.
Filing late helps fix records so future taxes are accurate instead of estimates from CRA guesses. Acting quickly reduces future troubles with money or paperwork.
Impact of Unfiled Returns on Future Tax Filings
Not filing returns makes future filings riskier because penalties stack up over time. The repeat failure penalty looks back three years for past failures punished before.
If you ignore repeated demands, penalties get worse each time until fixed by filing properly when asked again in letters sent across Canada—including Ontario cities like Markham and Toronto where services like Corp Nil Filing help companies file nil returns at $300 plus HST electronically with CPA checks for accuracy.
| Provision | Effect | Source |
|---|---|---|
| Subsection 150(2) | Demand sets firm deadline requiring return | Income Tax Act |
| Section 162(1) | Late filing penalty: 5% + 1%/month max 12 mo | Income Tax Act |
| Section 162(2) | Repeat failure penalty: 10% + 2%/month max 20 mo | Income Tax Act |
| Subsection 152(7) | Assessment without return possible | Income Tax Act |
| Sections 230 231.1 | Obligation for record keeping | Income Tax Act / CRA |
Verdict: Ignoring a demand to file letter puts companies—even inactive ones with no income—at risk of rising penalties and forced tax assessments that could cost more than just filing nil returns on time using trusted CPA help like Corp Nil Filing.
2026 Update: For calendar-year filers who get new demands, recent law changes stress following deadlines closely but keep penalties the same as above; voluntary disclosures still work but only under strict rules checked yearly.
Sources:
- Canada Revenue Agency – Avoiding Penalties
- Income Tax Act RSC1985 c1 (5th Supp.) sections 150(2), 152(7), 162(1),(2), 230,231.
Penalties for Late Filing and Repeat Non-Filing Under ITA Sections 162(1) and 162(2)
Penalties Under 162(1) and 162(2)
Penalties
The Income Tax Act has rules about filing T2 returns late. When the CRA sends a demand to file letter, you need to pay attention. Section 162(1) says if you file late without a good reason, you get a penalty. This penalty is 5% of the tax you owe plus 1% for each full month late, up to twelve months.
Now, subsection 162(2) is tougher. It applies if two things happen:
- The CRA sent a demand to file under subsection 150(2).
- You got a failure-to-file penalty in one of the last three years.
This repeat-failure penalty starts at 10% of unpaid tax. Then add 2% per full month late, up to twenty months.
Both penalties count based on taxes you owe that year. Even if you don’t owe any tax, ignoring a demand can trigger penalties.
Key Stat:
- Late-filing penalty: 5% plus 1% each month (max 12 months).
- Repeat-failure penalty: 10% plus 2% each month (max 20 months).
- Applies if you failed in any of the last three years [Income Tax Act sections 150(2), 162(1), 162(2)].
Worked Example
An inactive holding company got a CRA demand to file letter for the year ending December 31. It didn’t owe tax but missed filing its nil return on time. Because it had a penalty from last year, subsection 162(2) applied when it filed six months late. This caused higher penalties than section 162(1).
Numbers changed for privacy.
Interest Charges on Outstanding Balances
Interest builds up daily on unpaid taxes and penalties from their due date until you pay all. The Canada Revenue Agency sets rates every quarter on Canada.ca.
Interest compounds monthly. It’s separate from penalties but adds more money owed over time if ignored after a CRA demand to file letter or filing deadline notice.
CRA Rule: You must pay interest and penalties quickly after notices or demands [Canada Revenue Agency].
Eligibility Criteria and Application Process for Relief from Penalties and Interest
Taxpayer relief lets companies ask to cancel or lower penalties and interest if things beyond their control caused missed deadlines. This includes things like serious illness or natural disasters.
To qualify:
- Show good reasons why deadlines were missed despite trying your best.
- Apply through formal requests following taxpayer relief guidelines on Canada.ca.
- Relief isn’t automatic; each case gets reviewed based on your history and prior demands under subsection 150(2).
Keep records that support your claim and try to file on time going forward.
Payment Arrangements Available Through CRA Collections
If paying all taxes, interest, or penalties right away is hard after an official notice like a CRA demand to file letter, companies can ask for payment plans.
These plans let you pay over time while avoiding enforcement actions such as garnishments. CRA looks at your finances before approving payments, wanting proof that you cannot pay upfront but want to fix debts responsibly.
It’s better to call CRA Collections early after getting collection notices than ignore them. Ignoring can lead to stronger enforcement fast Canada Revenue Agency.
Prosecutorial Actions for Continued Non-Compliance and Associated Legal Consequences
Ignoring a CRA demand to file letter is an offence under subsection 238(1) of the Income Tax Act. This offence can lead to fines from $1000 up to $25,000 depending on how bad it is.
If you keep not complying, besides fines, criminal charges may follow. These legal steps go beyond normal admin actions and are serious.
Risk Warning: Not responding can get you fines [$1000–$25,000] plus other problems [Income Tax Act section 238].
For help with responses see our special guide page linked inside.
Additional Resources, Support, and Contact Information
Resources, Support and Contact
Resources
If you got a CRA demand to file letter or a demand to file notice Canada, don’t ignore it. Even if your corporation owes no tax, you must send a nil T2 filing on time. This section shows where to find help, support, and useful links.
Related Official Links to Forms, Publications, and CRA Programs
The Canada Revenue Agency has tools and programs to help with tax filings. Here are some important ones:
- Voluntary Disclosures Program (VDP): Fix missed or wrong returns without penalties sometimes. Check Canada.ca Voluntary Disclosures.
- My Business Account: Online portal for business owners to see notices like CRA demand to file letters. You can also update info and send papers here. Visit CRA My Business Account.
- Taxpayer Relief Provisions: Helps reduce penalties or interest in special cases beyond your control. More at CRA Taxpayer Relief.
Use these when the CRA sends a demand about corporate tax returns.
How Corp Nil Filing Can Assist with Resolving Demand to File Cases
CorpNilFiling is part of Gondaliya CPA in Toronto. We help with cheap nil T2 filing for inactive companies that get a CRA demand to file.
Here’s what we offer:
- Flat fee $300 + HST per year for one nil T2 return.
- We file electronically as a registered EFILE CPA firm.
- A CPA checks every return before we submit it.
This helps companies file fast even if they owe no taxes. You respond within the CRA’s time limit shown in the demand letter.
If you want help after getting a CRA demand letter anywhere in Ontario or Canada, contact us from 9:00 AM to 8:30 PM daily.
Contact Information for CRA Support: Phone Numbers, Emails, and Online Services
When dealing with a CRA official notice like a demand to file letter:
- Call 1‑800‑959‑5525 (toll-free) for business questions.
- Use My Business Account online for secure messages about your files.
Always check if letters or emails really come from the CRA before replying or sharing info.
Keep track of calls and emails—write down dates and who you spoke with. It helps if there are questions later on.
Guidance on Providing Feedback About This Page and User Privacy Considerations
Your privacy matters when reading this guide about corporate taxes under subsection 150(2) of the Income Tax Act in Ontario and across Canada.
If you want to share thoughts on this page’s wording or clarity, you can email us. But this won’t change your case outcome or replace advice from licensed CPAs who know current rules through 2026 updates.
Start fixing your corporate filing needs now. Contact CorpNilFiling at info@corpnilfilingfor300.ca or call 647‑212‑9559 for help with timely nil T2 filings anywhere in Canada including Ontario.
An owner received a demand for a year that had already been filed, and was ready to ignore it. We found the transmission confirmation for that year and sent it to the officer named in the letter, and the open years that had prompted the letter were filed alongside it. Figures changed for privacy.
FAQs on CRA Demand to File Letter and Corp Nil Filing
Frequently Asked Questions
FAQ
What does a CRA demand to file letter actually say?+
It lists the tax years needing filing, sets a firm deadline, cites subsection 150(2) of the Income Tax Act, warns of penalties, and provides contact details.
How is a demand to file different from a reminder or request?+
A demand is a legal order with strict deadlines. Reminders are softer notices encouraging filing but not backed by subsection 150(2).
Do I have to respond if my corporation owed nothing?+
Yes. Filing nil T2 returns on time is mandatory even if you owe no tax.
What happens if the year was already filed?+
You should confirm with CRA. Sometimes they send demands due to processing delays or errors.
Does receiving a demand change penalty calculations?+
Yes. It can trigger repeat-failure penalties under subsection 162(2), which are harsher than normal late-filing fines.
Can I ignore the demand and file later?+
No. Ignoring leads to penalties, tax assessments without return, and possible prosecution under subsection 238(1).
Is voluntary disclosure still possible after a demand to file?+
Sometimes. You may apply for relief but must act quickly and follow CRA rules closely.
What happens if the CRA assesses taxes without a return?+
CRA uses available info to estimate taxes owed, often resulting in higher amounts than actual liability.
How do I update my mailing address to receive notices promptly?+
Use My Business Account portal or call CRA business enquiries at 1-800-959-7775 to update contact info.
Industry Spotlights: Sectors With Nil Years
Industry Spotlights
Demands to file reach corporations in every sector, and the ones that surprise owners most are the quiet ones. A corporation with nothing to report still has a return to file, so a nil year can still produce a demand.
| Sector | Why a Nil Year Happens | Demand Point |
|---|---|---|
| Real estate holding companies | A property company between purchases | No income in the year still leaves a return to file |
| Property developers holding land | Land held before construction starts | Each quiet year answers its own demand |
| Physician and dental professional corporations | A corporation opened before practice income starts | A first-year return can be the one demanded |
| Technology startups before revenue | Incorporated before launch | An active business number with no returns draws attention |
| E-commerce brands not yet launched | Set up before the store opens | No sales is not a reason to set the letter aside |
| Consultants between contracts | A year with no billings | A nil return answers the year |
| Skilled trades | A company paused between jobs | Dormancy does not stop a demand |
| Restaurants not opened or closed | A lease that never started, or a closed location | Returns are due until the corporation is dissolved |
| Transportation owner-operators | A truck sold and the company parked | A parked company still files |
| Family investment holding companies | A company holding shares and nothing else | Holding companies answer demands like any other |
| Non-resident-owned Canadian companies | A Canadian company with foreign owners | Owners abroad can miss the letter; the mailing address matters |
- Real estate holding companies: A property company between purchases may report no income, but the year still needs a return, and a demand names the year it wants.
- Property developers holding land: Land held ahead of construction can leave several quiet years, each of which answers its own demand.
- Physician and dental professional corporations: A corporation opened before practice income starts can receive a demand for its first-year return.
- Technology startups before revenue: An active business number with no returns filed is one of the signs the CRA looks for.
- E-commerce brands not yet launched: A brand with no sales still files when the letter arrives.
- Consultants between contracts: A year with no billings is answered with a nil return by the letter’s date.
- Skilled trades: A company paused between jobs is dormant, and dormancy does not stop a demand.
- Restaurants not opened or closed: Returns stay due until the corporation is dissolved, so a closed location can still draw a demand.
- Transportation owner-operators: A truck sold and a company parked still leaves a return due each year.
- Family investment holding companies: A company holding shares and nothing else answers a demand the same way as an operating company.
- Non-resident-owned Canadian companies: Owners abroad are the ones most likely to miss a letter, so the mailing address on file matters.
Professional Guidance & Quick Reference
Quick Reference
Key Points at a Glance: CRA Demand to File Letter Essentials
- Demand Deadline: Firm date replaces usual deadlines under ITA subsection 150(2).
- Late Filing Penalty (162(1)): 5% plus 1% per month, max 12 months of unpaid tax.
- Repeat-Failure Penalty (162(2)): 10% plus 2% per month, max 20 months; applies if penalties were charged in last three years.
- Fine Range for Offence (238(1)): $1,000 up to $25,000 for ignoring demands.
- Look-back Period: Three years for assessing repeat failure penalties.
- Nil T2 Filing Fee: Corp Nil Filing offers electronic nil T2 returns for $300 plus HST per year.
- Registered EFILE CPA Firm: All filings done by licensed CPA with full review for accuracy.
- Scope: Services cover Canada-wide including Ontario regions like Toronto, Mississauga, Markham.
- 2026 Rules: New regulations emphasize strict adherence to deadlines; penalties remain unchanged but voluntary disclosure requires faster action.
Why Choose Corp Nil Filing?
- Flat fee $300 + HST per nil T2 return filing.
- CPA-reviewed electronic filing ensures compliance with CRA demands.
- Trusted by 1300+ clients with 5-star Google reviews.
- Registered CPA firm licensed in Ontario plus US CPA licences in Washington and Montana for cross-border expertise.
- Fast turnaround helps avoid costly penalties and enforcement actions.
What To Prepare Before Filing After Receiving a Demand?
- Copies of all CRA demand letters citing subsection 150(2).
- Business number (BN) and corporate details.
- Prior year filed returns or nil filings if any exist.
- Updated contact information through My Business Account or phone calls.
- Documentation supporting non-filing reasons if requesting taxpayer relief or voluntary disclosure.
Best Practices After Receiving a CRA Demand to File Letter
- File all outstanding returns before the deadline set in the demand letter.
- Avoid waiting on phone calls or follow-ups; meet the written deadline first.
- Confirm legitimacy of contacts claiming to be from CRA via official phone numbers or portal logins only.
- Keep records of all communications with CRA officers for future reference.
Contact Information & Resources
| Purpose | Contact Details | Notes |
|---|---|---|
| General Business Inquiries | 1‑800‑959‑5525 | Toll-free |
| Business Tax Enquiries | 1‑800‑959‑7775 | For corporate tax questions |
| Online Account Management | My Business Account | View notices and update info |
| Voluntary Disclosures Program | Canada.ca VDP | Submit corrected returns |
| Verify CRA Contacts | Verify Contact | Avoid scams |
For expert help after receiving a CRA demand, contact Corp Nil Filing at info@corpnilfilingfor300.ca or call 647‑212‑9559.
Quick Answers
At a Glance
| Question | Answer |
|---|---|
| What the letter is | A demand under subsection 150(2) of the Income Tax Act |
| Which deadline applies | The date stated in the letter |
| Owed nothing | Still file; a nil return answers a nil year |
| Year already filed | Check the confirmation and contact the officer named in the letter |
| Ordinary late penalty | 5% of unpaid tax plus 1% a month, to 12 months |
| Repeat-failure penalty | 10% plus 2% a month, to 20 months, where a demand was sent and a prior penalty was assessed in the last three years |
| Offence for not filing | Fine of $1,000 to $25,000 on conviction |
| How the return goes in | Electronically for tax years starting after 2023 |
Who This Is For / Not For
Fit Check
- For: owners of inactive, dormant and holding corporations who have received a CRA demand to file a T2 return.
- For: corporations with several unfiled years, or winding up and needing a final return before dissolution.
- Not for: individuals who received a demand for a personal T1 return.
- Not for: owners facing prosecution, who should speak to a tax lawyer.
People Also Ask
Related Questions
Is a CRA demand to file letter a scam?+
A genuine demand cites subsection 150(2) and names the year and the date. Check it through My Business Account or by calling the CRA on a number from Canada.ca, not a number from the caller.
Does the six-month T2 deadline still apply after a demand?+
The demand sets its own date for the year it names. Work to the date in the letter.
Can a demand cover more than one year?+
Yes. The letter lists the year or years it designates, and each one needs a return by the date given.
Can I answer a demand with a T2 Short return?+
Where a corporation qualifies for the T2 Short return, that is the return filed for the year, transmitted electronically.
What should I keep after filing?+
The demand letter, the CRA confirmation for each return transmitted, the signed Form T183CORP and any notice of assessment that follows.
Glossary of Key Terms Related to Demand to File Letters
Definitions
- Demand to File: Legal notice under ITA s.150(2) requiring overdue T2 returns filed by specified date.
- Designated Year: Specific fiscal year(s) named in the demand letter needing filing.
- Stipulated Time: The exact deadline set in the letter replacing usual deadlines.
- Nil Return: A T2 return showing no income or activity but required by law when demanded by CRA.
- Late-Filing Penalty (162(1)): Standard penalty of 5% plus monthly increments on unpaid taxes for late filing without prior repeated failure history.
- Repeat-Failure Penalty (162(2)): Higher penalty applied if prior failures occurred within past three years after receiving demands before.
- Assessment Without Return (152(7)): Tax assessment done by CRA based on estimates when no return is filed after demand issuance.
Want a checklist to work from? You can download the free demand to file checklist before you start your filing.
This quick self-check shows what your demand is likely to need. Please answer the five questions below.
Demand to File Letter Check
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Points to raise with us:
This is a general prompt, not tax or legal advice or a quote. Your position depends on your full facts.
Answering a Demand to File: How CorpNilFiling Can Help
Start with the letter, your business number and your year-end
CorpNilFiling reads the year and date in your demand, prepares each nil T2 the letter designates and any other open years, sends you Form T183CORP to sign securely, and has a CPA review each return before it is transmitted electronically — at $300.00 plus HST per tax year, with your CRA confirmation emailed within 3 business days.
Next Steps
Please start your filing with CorpNilFiling and have three things ready: the demand letter itself, the corporation’s business number and year-end, and a list of any other years still unfiled. Those three tell us which returns answer the letter and by when. We are open 9:00 AM to 8:30 PM, Monday to Sunday, at 55 Queen St E, Suite 1205, Toronto, and file for corporations across Canada. If our content helps, please add corpnilfilingfor300.ca as a preferred source on Google.
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Editorial policy: We research against CRA, Department of Justice, CPA Canada and CPA Ontario sources, fact-check the figures, and Sharad Gondaliya, CPA, reviews the content, which we update as the rules change.
Disclaimer: This article is educational information only and is not tax or legal advice, and it is not advice on prosecution or criminal exposure. Whether a penalty applies or is waived, and whether a voluntary disclosure is accepted, depends on the facts and current law. Gondaliya CPA performs compilation engagements under CSRS 4200 and does not perform audit or review engagements. Please consult a licensed CPA, and a tax lawyer where prosecution is raised, before acting.