CRA Audit, No Receipts, What Should You Do?
The CRA has a wide range of powers and an audit can be frightening. Going into a CRA audit no receipts and without the right documents is even more so. Here is what you can do to improve your situation and how we can help.
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How to Handle a CRA Audit No Receipts
Finding out that you are being audited by the Canada Revenue Agency (CRA) can be incredibly stressful. The CRA has very strong powers and agents use these powers to put pressure on people and intimidate them. Going into a CRA audit no receipts can be even more anxiety-causing. That’s because having the right documents is very important to surviving a CRA audit.
In an audit, the agent will almost certainly request proof to back up your claims. If you don’t have the receipts, invoices, and proper documentation to support your case, it can be very difficult to convince the auditor that you are being truthful. While you don’t need to send in expense receipts and other documents when you file your taxes, you are required to keep them and present them when requested. If you’re not able to do so, the agency may decide to disallow the expenses you deducted, which means you’ll owe more tax debt.
You may be able to recover some of your documents by looking at bank and credit card statements, but there will be some documents that you might have trouble getting if you have lost the originals. In some instances, you may have to find oral evidence. This may include testimony from a credible individual or a business that confirms that you did make a purchase, for instance. However, if this is the situation you are faced with, you’ll want to have professional help on your side. An experienced professional can help you prove your case with the evidence you have.
A CRA audit no receipts situation doesn’t necessarily mean that you’ll be completely at the mercy of the CRA, but it does mean that you will likely be in a pretty difficult situation. In these instances, it’s important to have professional help on your side to assist you.
Getting Professional Help with an Audit
Whether you’re in a CRA audit no receipts situation, or if you’re being audited for any reason at all, it’s a very good idea to speak with a professional as soon as you receive notice that you’re being audited. CRA auditors are incredibly experienced. The agency is tough to communicate and negotiate within the best of times, and this becomes even truer during an audit.
In a simple audit, working with an experienced professional can help you explain that you claimed what you were entitled to and make sure that you have the paperwork needed to back up your claims. However, in more complicated situations such as ones where you don’t have your books in order, where you’re lacking proper documentation, or where your accountant made significant errors, it’s crucial to work with a tax lawyer. Going into a CRA audit no receipts and no help will likely lead to a difficult situation for you.
This is especially true in situations where the agency wants to do a “net-worth audit.” This is where a CRA no receipts issue can be incredibly problematic. If you can’t back up the details of your tax return and income situation with documentation, the CRA can do its own rough calculation of how much your living expenses were in the audit period and how much income you like underreported during those years. This estimation may not be accurate, but it could very likely lead to you having to pay more money in taxes. Professional guidance is crucial here.
The team at Farber Tax Solutions is made up of experienced ex-CRA professionals who know what it takes to resolve tax issues. We can work with you through every step of the audit process and make sure your rights are being protected. For more information, please contact us today.
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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