The auditor sent my client a T2029 waiver. When should they sign it, and how do they get out of it later?
In 2026, a client should sign Form T2029 only when the audit needs more time than the normal reassessment period leaves, and only if it names one matter. It must be filed within that period (three years from the notice of assessment for individuals and CCPCs, four for other corporations), and Form T652 ends it six months after filing.
What does a signed T2029 let the CRA do?
A T2029 lets the CRA reassess a year after the normal reassessment period has ended, but only for the matter written on the form. Subparagraph 152(4)(a)(ii) allows the reassessment if your client filed a waiver in prescribed form within the normal period, and 152(4.01)(a)(ii) limits it to "a matter specified in a waiver" laws-lois.justice.gc.ca. The form's full name is "Waiver in respect of the normal reassessment period or extended reassessment period"
canada.ca.
| Waiver | Provision | File it within | What it opens | How it ends |
|---|---|---|---|---|
| Normal period waiver (T2029, first box) | ITA 152(4)(a)(ii) | The normal period: 3 years from the original notice of assessment, or 4 for a mutual fund trust or a corporation that is not a CCPC | Only the matters specified, ITA 152(4.01)(a)(ii) | Form T652; no reassessment on the waiver after six months from filing, ITA 152(4.1) |
| Extended period waiver (T2029, second box) | ITA 152(4)(c) | The extra three years under 152(4)(b) or (b.1) | Only the matters specified, tied to the 152(4)(b) ground | Form T652, ITA 152(4.1) |
| T1135 extended period waiver | ITA 152(4)(c.1) | The extra three years under 152(4)(b.2) | Only the matters specified | Form T652, ITA 152(4.1) |
| GST/HST waiver | ETA 298(7) | The four year assessment period | The matter specified | Notice of revocation on six months' notice, ETA 298(8) |
The normal period itself runs from the date the CRA sent the original notice of assessment, not from year end or the filing date laws-lois.justice.gc.ca. The full rules, including the cases where the CRA gets extra time without any waiver, are on the CRA reassessment period page.
When should your client sign, and when should they refuse?
The waiver buys time for the audit, and the audit is the only reason to give it. When a year is close to its statute barred date, the CRA's AD-20-01 tells auditors to weigh that date when setting deadlines, says response times "may be shortened" and that a follow up request may be denied, and tells them to proceed with the proposed reassessment if no reply comes canada.ca. So the choice is usually between a narrow waiver and a reassessment built on whatever the auditor has.
| Situation | Sign? | Why |
|---|---|---|
| Audit open, your client needs time to produce records or answer the proposal, and the normal period ends soon | Yes, limited to the issue under audit | Without it the auditor reassesses on the proposal as it stands |
| The auditor's draft says "all matters" or describes the whole return | Not as drafted | The reassessment reaches whatever the waiver specifies, so a broad description opens the whole year |
| The normal period has already ended | Nothing to sign | A waiver counts only if filed within the normal period, ITA 152(4)(a)(ii) |
| The waiver names an end date ("until December 31, 2027") | Rewrite it | The form says a waiver must not specify a time limit; it ends only by Form T652 |
| Your client's year depends on a lead case before the courts | Usually, with a written agreement | IC75-7 says the taxpayer would normally file a waiver for each relevant year |
| No issue has been identified and no audit is under way | No | It only gives the CRA more time |
Lead cases come from IC75-7: where the CRA and your client agree in writing to be bound by the outcome of another case, the taxpayer "would normally file a waiver in prescribed form for each relevant year", and without a written agreement the CRA may refuse to use its discretion to reassess canada.ca.
A waiver can help your client too. Section 152(4) doesn't restrict a waiver reassessment to increases, and a corporation can't use the ten year refund window in 152(4.2), which is limited to individuals other than trusts and graduated rate estates laws-lois.justice.gc.ca. A corporation with its own adjustment still pending near the deadline can keep that matter open the same way.
Which dates decide a CCPC waiver audited in 2027?
Your client is a CCPC with a December 31, 2023 year end. The T2 was filed in June 2024 and the notice of assessment is dated July 15, 2024. In spring 2027 the auditor questions $48,000 of management fees paid to the holding company and sends a T2029.
| Event | Date | Rule |
|---|---|---|
| Original notice of assessment | July 15, 2024 | Starts the clock, ITA 152(3.1) |
| Normal reassessment period ends | July 15, 2027 | 3 years for a CCPC, ITA 152(3.1)(b) |
| Last day the T2029 can be filed | On or before July 15, 2027 | ITA 152(4)(a)(ii) |
| Your client mails Form T652 | Postmarked February 1, 2028 | Mailing counts as filing on the postmark date (Form T652) |
| Last day the CRA can reassess on the waiver | August 1, 2028 | Six months after filing, ITA 152(4.1) |
If the waiver names only the deductibility of the $48,000 of management fees for the year ended December 31, 2023, the CRA can't use it to revisit shareholder loans or capital cost allowance for that year laws-lois.justice.gc.ca. If the client never revokes, the waiver has no end date, so the management fee issue stays open indefinitely.
Had the auditor sent the waiver in August 2027 instead, your client could simply decline: the normal period would already be over, and a waiver filed then would not meet 152(4)(a)(ii).
How should the matter be worded so the waiver stays narrow?
The form itself sets two validity rules: the matter being waived must be written in the space provided, and the waiver must not specify a time limit canada.ca. Each form covers one taxation year, so a two year audit needs two waivers.
| Wording | Effect |
|---|---|
| "The deductibility of $48,000 of management fees paid to 123 Holdco Ltd. in the year ended December 31, 2023" | Opens one item for one year |
| "Management fees and related party transactions" | Opens every related party item, wider than the audit issue |
| "All matters" or "income and expenses" | Opens almost the whole return |
| Matter left blank | Fails the form's own validity rule |
The waiver is signed by the taxpayer, a legal representative or, for a corporation, an authorized officer, and after a name change or amalgamation the form asks for the previous name in brackets canada.ca. A waiver included in the return when it is filed is not valid, because it isn't filed within the normal period
canada.ca. For the extended period box, the form asks you to cite the subparagraph of 152(4)(b) that would otherwise have allowed the reassessment.
How does Form T652 revoke the waiver, and what do the six months mean?
Form T652, Notice of Revocation of Waiver, is the only way out canada.ca. Under 152(4.1), once it's filed the CRA can't reassess on the strength of the waiver after the day that is six months after the filing date
laws-lois.justice.gc.ca. The CRA's T2 page says to file it at your tax services office and that the revocation takes effect six months after you file
canada.ca.
The form adds the procedure: a separate T652 for each waiver, with a copy of that waiver attached, filed with the tax services office where the waiver was filed. A mailed notice is filed on the postmark date, and the notice "cannot be rescinded or cancelled" once filed canada.ca.
Revoking doesn't close the year at once. It gives the CRA a six month deadline to reassess the named matter, so expect a reassessment inside that window if the issue is still live.
One stale line to ignore: the T2029 form, last revised in 2010, says only a normal period waiver can be revoked and mentions draft legislation for extended waivers canada.ca. Current 152(4.1) covers waivers under 152(4)(a)(ii), (c) and (c.1), so an extended period waiver can be revoked with T652 too
laws-lois.justice.gc.ca.
Do GST/HST waivers work the same way?
Mostly. Under ETA 298(7), a registrant can waive the four year limit by filing a waiver in prescribed form, within that period, specifying the matter. Under 298(8), it can revoke the waiver on six months' notice, and 298(4)(c) lets the CRA assess past the limit while a waiver is in effect laws-lois.justice.gc.ca. The GST/HST clock runs from the later of the return due date and the filing date, covered on the reassessment period page. An income tax T2029 does not cover GST/HST, so a joint audit needs a waiver under each statute.
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Can the CRA reassess other items on the return once my client signs?
Not on the strength of the waiver. Subsection 152(4.01) limits the reassessment to the matter specified in the waiver laws-lois.justice.gc.ca. Misrepresentation through neglect, carelessness or wilful default, or fraud, is a separate exception that needs no waiver.
What happens if my client refuses to sign?
The auditor usually finalizes the file before the period ends. AD-20-01 lets auditors shorten response times near a statute barred date and proceed with the proposed reassessment when there's no reply canada.ca. Your client can still object to that reassessment by the notice of objection deadline, and the audit steps are on the CRA audit process page.
Does a T2029 expire on its own?
No. The form says a valid waiver must not specify a time limit canada.ca, so it stays in effect until your client files Form T652 and the six months run out
laws-lois.justice.gc.ca. Diary every signed waiver so it doesn't sit open for years.
Can my client sign the waiver after the three years are up?
No. A normal period waiver only works if it is filed within the normal reassessment period laws-lois.justice.gc.ca. An extended period waiver is different: it can be filed within the extra three years, but only for the situations listed in 152(4)(b) or (b.1)
laws-lois.justice.gc.ca.
General information for the tax year shown, not advice for a specific client. Confirm the facts before you file or remit.