The Canada Revenue Agency’s Tax Earned by Audit (TEBA) metric tracks the gross value of tax assessed through audit activity. Although TEBA does not determine ultimate liability, it influences internal performance expectations and resource allocation across audit programs.
When combined with a March 31 fiscal year-end, this metric creates observable patterns in reassessment timing, quantum, and durability. The resulting architecture shapes how reassessments function within the dispute system.
This paper examines how TEBA interacts with audit closure pressure, objection-stage refinement, and institutional correction cycles.
TEBA measures the total tax assessed through audit activity. It records asserted amounts at the point of assessment rather than sustained amounts following objection or appeal.
Because TEBA captures issuance rather than endurance, it separates two ideas that were once assumed to move together:
This separation has structural consequences.
Assessment volume and assessment sustainability do not operate within the same performance frame. Issuance generates immediate internal credit. Reduction or reversal typically occurs in different organizational units and later reporting cycles.
The CRA’s fiscal year concludes on March 31. Internal reporting cycles create pressure to finalize files before year-end.
Public reporting and oversight bodies, including the Office of the Auditor General, have observed a disproportionate concentration of audit closures and reassessments in the final quarter of the fiscal year.
This pattern reflects structural timing incentives rather than episodic decision-making. When closure deadlines coincide with revenue-tracking metrics, reassessment issuance tends to accelerate.
The effect is not uniform across files. It is most visible in large or complex audits where assessment quantum materially affects aggregate TEBA totals.
Reassessment issuance under a TEBA-influenced system does not require confidence that the full asserted amount will withstand review.
The dispute framework provides downstream correction mechanisms:
Where internal metrics record issuance rather than endurance, a probabilistic posture toward assessment durability becomes structurally rational.
Partial sustainment qualifies as institutional success. Full reversal does not retroactively unwind initial issuance credit.
This architecture normalizes refinement through dispute rather than precision at first instance.
Auditor General reports have documented high rates of reassessment reduction at the objection stage.
Where reassessments are refined downstream, objection functions as a systemic adjustment mechanism rather than an exception to audit accuracy.
The system thereby distributes risk:
This sequencing places the evidentiary and financial burden of correction on affected taxpayers during the interim period.
When TEBA metrics interact with fiscal year-end closure targets, three observable features tend to emerge:
The result is a system in which asserted amounts may remain payable, secured, or reserved for extended periods before durability is tested.
Under this incentive architecture:
Reassessments therefore function not solely as determinations of liability but as opening positions within a structured revenue-reporting environment.
This structure does not imply bad faith or misconduct. It reflects incentive design.
Within this system, dispute is not an anomaly. It is embedded.
Objection and appeal operate as integral components of assessment architecture. The durability of a reassessment is frequently determined after issuance rather than before.
When incentive metrics prioritize assessed amounts over sustained amounts, the dispute process becomes the mechanism for clarifying final exposure.
TEBA and fiscal year-end reporting pressures create an institutional environment in which reassessments are:
In this environment, reassessment operates as a system-generated event rather than a final liability determination.
Correction occurs within the dispute framework.
The design of that framework, and the timing of its activation, determine how and when asserted exposure converges with sustainable exposure.
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