Ok, someone who does know for sure. Keep your returns going back 6 years; in other words if you’ve just filed your 2001 return, you can get rid of your '95 return and anything earlier - you’ll have six years worth of returns on your own file then - 96, 97, 98, 99, 00, and 01.
CCRA can audit back 6 years… so after you’ve filed for 2001, they can audit you on anything going back to '96 - AND - if they find something suspicious in any of those returns going back 6 years, they can then go back another 3 years from '96… find something suspicous there then they’ve got a pattern, and can go back 3 years prior to that, and so on and so forth. It depends how much time they have and how much money they believe you’ve hidden away. It’s unlikely they’d bother to go back really far unless you’ve been doing some major tax evasion worth many thousands of dollars to them.
So, if you’ve been evading on a consistent basis - AND they catch on - they can essentially go back to your first return ever filed. However, the only reason to keep every return is if you’re a major criminal, but then again keeping a paper trail of your own criminal activities would defeat the purpose.
So, for all you regular law-abiding types (and the shady characters as well :D), keep your Canadian tax returns going back 6 years.
- An employee of a certain very big tax preparation company -