What to Do When Audited by CRA
If you are audited by CRA, your first reaction might be to worry and stress. That’s understandable. However, we can help. Here is what you should do first when audited by CRA.
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What To Expect If You’re Audited by CRA
Finding out that you’re going to be audited by CRA can be quite surprising and even scary. It’s understandable to be anxious or worried when the Canada Revenue Agency wants to do an audit. However, the best thing that you can do is not panic and try to co-operate as best you can.
Ignoring the CRA will not make the agency go away. You usually have 30 days to respond to a request from the CRA, and you should do so if you can. Failing to respond to a CRA notice will only get you into more trouble. For instance, if the CRA requests that you send them certain receipts, documents, or records, you should do so. In some cases, once the CRA reviews the documents, the agency will be satisfied, and you won’t have to worry about it again.
However, you may receive notice that you will be audited by CRA. If this is the case, do not panic. You will be contacted by mail or phone (or both) and you will be told the time, date, and location of the audit. An audit will normally take place at your home, business, or at a CRA office.
What May Cause You To Be Audited by CRA
A CRA audit can be triggered for many reasons, ranging from unusual expense declarations to inconsistent reporting to sudden changes in your financial situation. The CRA may look at the information it has on file and compare that information to other similar taxpayers. For instance, you may be audited by CRA if you report an income that is significantly lower than other similar taxpayers who live in your area. Note that self-employed individuals tend to be audited more often than those who work for an employer.
The CRA can audit your tax return within four years of the original Notice of Assessment. However, if the agency suspects fraud, it can go back farther. It is important to keep all relevant tax documents for at least six years, in case you are asked to produce them.
What You Can Do About A CRA Audit
If you are audited, it’s important that you do not panic. You can survive a CRA audit as long as you are prepared and you know what you’re doing. It helps to have professionals on your side who understand the audit process and can assist you.
At Farber Tax Solutions, we can help you navigate a tax audit, wherever you are in the process. Our experienced team of professionals can communicate with the CRA on your behalf and even accompany you to the audit. We make sure that your audit goes smoothly, that your rights are protected, and that your audit is fair. Communicating with the CRA and navigating complex CRA processes can be very difficult, time-consuming, and intimidating. But working with an experienced team makes it easier. Contact us today to find out how we can help you.
Farber Tax Solutions can help you successfully deal with CRA problems. We utilize the experience of our tax experts to:
- 1| Offer a comprehensive solution that is focused on achieving the most favourable possible outcome for your tax issue;
- 2| Communicate with the CRA on your behalf and navigate the entire CRA dispute process; and
- 3| Offer a complete solution to your tax problems, including ex-CRA professionals and tax lawyers from Farber Tax Law.
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