A Notice of Assessment is a statement from the revenue agency informing the taxpayer of the amount of tax owed, the amount of tax already paid, tax credits and any contributions made to a Registered Retirement Savings Plan. Suppose the taxpayer had owed any refunds by the tax agency, a cheque will always be included in the Notice of Assessment.
Taxpayers receive Notice of Assessment for various reasons. They include but may not be limited to the following-:
It is a regular correspondence
The first reason for taxpayers receiving Notice of Assessment is because it is a regular correspondence that the tax authorities will send on an annual basis. Just like filing tax returns, which is done on annual basis, so is the issuance of the Notice of Assessment. It usually follows that the authorities will send the Notice of Assessment once they receive the duly filed tax returns and have reviewed them. The Notice of Assessment can thus be considered as an acknowledgement by the authority that you filed your tax returns and they also give you a comprehensive breakdown of tax status.
For mortgage qualification
Notice of Assessment is also heavily utilized by lenders whenever they are considering a borrower’s application for a mortgage. In this context, Notice of Assessment is a document used by lenders and their underwriters to verify the income status of the borrower, and especially if the borrower is self employed and thus can’t produce pay slips from the employer. Since nobody seeking mortgage can be a tax defaulter, the lenders will rely on the tax information provided on the Notice of Assessment to verity the applicant’s income as well as tax liability. Through the NOA document, they will know if the application is a tax defaulter, in which case, they may not consider them for the mortgage.