CRA PERSONAL INCOME TAX AUDIT
CRA PERSONAL INCOME TAX AUDIT REPRESENTATION
If you have received a notice from the CRA questioning or disallowing certain deductions, do not ignore it, don’t panic, talk to the auditor only enough to refer him/her to your tax professional, and get organized. Without the appropriate response, the CRA will change your returns and assess a new liability along with additional penalties and interest.
You will normally receive a letter stating that your tax return has been selected for an examination. By no means does this imply that you are lying or cheating on your tax return. The goal of the CRA audit process is to increase the tax compliance and collect the appropriate revenue for the government. The moment you receive notice of an examination is the right moment to seek professional CRA representation.
The CRA has “normal” percentages for deductions based on income levels, and the more your deductions vary from the norm computed by the CRA, the greater the chance of error on the return. Therefore, those returns are the ones more likely to be audited. CRA audit rates are rising dramatically for all types of taxpayers. Over the last few years since last global financial crisis, the rate at which the CRA is auditing individual taxpayers has risen significantly, and the audit rate for high-income taxpayers and businesses skyrocketed.
Because the tax laws are subject to interpretation and are neither black or white, there is no such thing as a perfectly correct tax return. CRA audit agents will often try to expand the scope of the audit to include other areas of the tax return, or include other years beyond the tax return in question. CRA Tax Rescue representatives can conduct the audit in such a manner as to “limit the scope” or limit the amount of information the agent sees or requests to examine.
Always prepare by providing your representative with the information requested by the auditor in an organized and timely manner, it limits the amount of information that is exposed to CRA scrutiny and shows that you are well prepared. Organized records also have a tendency to make the auditor think you are a “squeaky clean” taxpayer and may result in the auditor limiting their scope.
CRA Tax Rescue has substantial experience representing individuals, professionals, and business owners facing CRA audits. You need an experienced representative on your side when facing the CRA to resolve your tax liability.
An Experienced Tax Specialist can thoroughly research the tax laws. The scope of tax research is not just limited to the Canada Revenue Agency, but also tax court rulings and decisions. Tax Specialists have advanced training, technical expertise and financial insight to seek out and address all legal tax issues.