The CRA can gp back three years to disallow claimed expenses on a tax return leaving you with a hefty tax bill including interest and penalties.
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It can be challenging to figure out which expenses you can claim on your tax return. The Canada Revenue Agency (CRA) has the power to challenge and disallow any expense that was claimed in your tax returns. It is up to the taxpayer to prove that the disallowed expense was legitimate by providing the CRA with proper books and records.
What Does the CRA Allow Taxpayers to Claim?
While the full list of deductible expenses on a taxpayer’s return is very extensive, some common claims are:
- employment-related expenses;
- business-related expenses;
- real estate expenses;
- medical expenses, such as fees paid for prescription drugs or visits to the doctor;
- child care expenses, such as support payments, adoption expenses, or fitness and arts credits; and
- annual dues for memberships in a trade union or professional board.
Eligibility to claim expenses depends on the circumstances of every taxpayer, including their employment status and lifestyle.
What if the CRA Disallows Claimed Expenses?
Taxpayers are required to know the law and self-determine the eligibility of their expenses. Taxpayers should only claim amounts that can be supported by documentation. Generally, taxpayers must keep books, records for a period of six years from the end of the latest year to which they relate and the CRA can ask to see this information during an audit or review. Taxpayers with lackluster books and records could find themselves with an unexpected tax bill if the CRA audits and disallows expenses.
How We Help
For taxpayers undergoing a CRA audit of their expenses, our experts can assist by providing guidance and advice on navigating the audit, attending relevant meetings with the CRA, corresponding with CRA auditors on your behalf, identifying discrepancies in the audit, and responding to all related audit proposals until the audit is concluded.
Taxpayers that disagree with audit findings should file a dispute immediately to the Appeals Division of the CRA or the Tax Court of Canada. Our team of ex-CRA, lawyers, and accounting professionals have the knowledge and experience to win your case. Our comprehensive service includes submitting arguments to the CRA/Department of Justice, conducting the necessary due diligence on your file, researching the relevant statutes and case law to support your position, analyzing all CRA audit reports to find discrepancies in your favour, and corresponding with the CRA/Department of Justice over the course of the tax dispute until a decision is rendered.
Let Us Solve Your Problems
Our team of ex-CRA staff, lawyers, and accountants brings extensive experience to ensure that your audit or tax dispute is resolved smoothly and that your rights as a taxpayer are respected. We are committed to supporting you throughout the entire process and are here to help at every step of the way.
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.