It is never a good idea to deal with the CRA on your own. They use tax and accounting terms which you may not fully understand. If the CRA contact you chances are they THINK that you did something wrong or owe them money. Don't go alone to meet with the CRA.
Our Senior Tax & Accounting Manager worked for the CRA for 15 years in all aspects of audit. In our opinion his tax knowledge is second to none, and his knowledge of CRA procedure and policies is virtually unsurpassed in the public accounting industry.
If you have CRA issues or have been contacted by the CRA for the purposes of a review or audit, call us. Audit representation is MUCH cheaper than the tax bill that the CRA may present you with after ripping your records apart.
In light of this advice here are some pointers you can use if you ever find yourself dealing with the CRA.
- If the CRA calls you on the phone do not answer their questions. Request that they send you a letter outlining what they information they want and who is requesting it.
- Never give the CRA your original documents. Not only are copies acceptable but the CRA audit manual states this as a fact. Facts aside, if the CRA loses your records, or they get lost in the mail the CRA will not show leniency.
- Always ensure that you review your business records prior to letting the CRA see them. As part of this process make sure that all personal non-business records are removed from boxes containing your business records.
- Ensure that your records are organized in order to make the review process easy.
- Never assume that the CRA is correct and unbeatable. They are often wrong and have assessments overturned by the Appeals section.
- The CRA regularly loses in Tax Court.
- Never assume that giving in will make it all go away and prevent the CRA from digging deeper or auditing other areas or taxes (ie GST). It is common practice for the CRA to take the results of one audit (Income Tax) and use it as a basis for assessing on another audit (GST).
- Always deal with CRA issues in a timely fashion. Ignoring them or delaying will only cause bigger problems, or prevent you from being able to exercise all you rights.
Objecting and Appealing
- If you don’t agree with the outcome of an audit you can object or appeal the audit assessment.
- Objecting and appealing cannot make the outcome of the audit any worse. CRA Appeals cannot increase the amount of the assessment.
- In order to be successful in your appeal you must be able to provide additional documentation or argue valid points that show how the auditor misapplied tax law.
If you want to enhance your chances of success let our CRA expert put his knowledge to use to solve your CRA issues.
See our Blogs for other insights and actual stories of CRA interactions.