The Canada Revenue Agency has been clear in its message; it has been ramping up with increased Audits/Reviews, and additional Auditors. Their focus? Benefits.
How do you make the inconvenience of an audit or review just a little less painful? Our ProStrata-G ProAdvisors suggest the following:
Be Prepared
Gather all your documents BEFORE CRA comes calling
Discuss your concerns with your tax preparer
Be sure to understand your tax obligations and tax credits CLEARLY
CRA will likely want to review any COVID benefits recieved in 2021
Make sure your contact information is up to date with CRA. Consider creating a MyAccount if you haven't already. This is the safest way for The Canada Revenue Agency to contact you. Apply Here: CRA My Account
Watch for Notices in the Mail
CRA rarely starts with a phone call
Expect a letter but also be prepared for an email or phone call if they are unable to reach you via mail.
Answer all questions in a timely manner
Any letter requesting information will also have a deadline. Don't miss deadlines!
Be sure to send a response requesting more time if you are unable to meet a tight deadline
Be polite. Your auditor is only doing their job, and it's not personal. It's likely your auditor will ask confirmation of amounts from your filed return, or ask clarification on information. If your tax return was accurate, nothing will change. If there were mistakes/miscalculations or missed information they will re-assess and provide a new Notice of Assessment (tax bill). In rare cases, you may get money refunded to you.
Understand your Taxpayer Rights
CRA Auditors MUST adhere to a code of conduct that does not deviate from the Taxpayers Rights.
Remember you have the right to representation when communicating with CRA.
When you feel the action of a CRA agent has violated your rights, be sure to contact their immediate supervisor. And if the issue can not be resolved through the agent or supervisor, contact the Canadian Taxpayers Ombudsmen.
Call on a Professional for Audit Representation
Our ProAdvisors have experience with CRA and the sometimes complicated lingo surrounding income tax audits and the Canadian Tax Code
We can provide an unbiased assessment of your audit risk and strategies for ensuring a smooth audit.