Tax Audit Questions
Facing a CRA tax audit? Understanding the key terms, processes and having the right representation can help you get through it. With ex-CRAs, tax lawyers and tax accountants, Farber Tax Solutions can handle the CRA on your behalf.
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What common mistakes do taxpayers make during a CRA tax audit?
An audit by the Canada Revenue Agency (CRA) is a review of a taxpayer’s books and records to ensure that tax returns accurately reflect the taxes owed and all filing and payment obligations are being met. The following is a list of common mistakes made by taxpayers when dealing with a CRA audit.
- Ignoring the CRA: taxpayers sometimes believe that ignoring the CRA will make an audit disappear. This is an ill-advised tactic that only serves to harm the taxpayer. Ignoring the CRA does not make them go away. Instead, by ignoring their problems, taxpayers end up missing important deadlines, and forcing the CRA to audit based on assumptions. These assumptions often lead to grossly inaccurate reassessments that are never in the taxpayer’s favor.
- Providing unnecessary information: taxpayers often provide too much or unnecessary information during a CRA audit in an attempt to be cooperative and forthcoming. Unfortunately, they end up making admissions or disclosures that can complicate matters unnecessarily. It is important to be aware that CRA auditors are hunting for inconsistencies. Providing unnecessary information creates additional opportunities for the CRA to find errors and discrepancies. Taxpayers should strongly consider professional representation before corresponding with the CRA.
- Giving up: a CRA audit is a stressful and time consuming process that can quickly become overwhelming. In order to end their frustration, taxpayers concede to the CRA and accept their reassessments at face value, even when they know the CRA is wrong. Giving up out of frustration should never be an option. Our tax system has an independent objections and appeals process that taxpayers should take advantage of with a professional representative. Having an independent review of the audit can often lead to reductions in the amount of taxes owed. In addition, the CRA frequently makes errors in audits that taxpayers never even realize. By giving up, taxpayers accept the CRA’s work – errors included. Hiring a professional to review the CRA’s work is a smart move that can save taxpayers thousands of dollars.
Taxpayers should seek professional representation immediately upon receiving any correspondence from the CRA. The professionals at Farber Tax Solutions can help provide guidance throughout the audit process and yield significant tax savings. Our team includes former CRA agents, accountants, financial and legal professionals, who work with you at every stage of the audit to resolve your tax problem quickly and efficiently.
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, lawyers, and experienced accountants.
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