The Canada Revenue Agency and You
An accounting friend called me today and said that her client had been contacted by CRA to re-schedule a previously scheduled audit appointment. The client told the auditor he would have to check with his accountant to see if they were available. The auditor’s response was somewhat lukewarm and basically the attitude was why would you need your accountant for an audit meeting. The client had not previously told the auditor his accountant would be coming to the meeting, so the auditor was probably caught off guard. That said, the auditor should have been happy, because he would be able converse with someone who knows tax law and accounting.
Here is the issue. This particular client had already had a run in with CRA over GST, and represented himself. The GST auditor put him at ease, was nice, and said she would be helpful and fair. In the end, she was extremely unfair and unreasonable, and basically threw the client under the bus, and told him to pay up or the CRA would go back 5 more years (can you say intimidation and threats). He was also told that if he didn’t pay his file would “be sent upstairs for an Income Tax audit”. He paid the bill and thought okay I am done. Glad that is over. One month later he got notice that he was going to have an Income Tax audit, when he asked how he was selected he was told “it is just random”.
Having realized that he was not being treated fairly he went and found an accountant that had experience dealing with CRA to see if he could get help with the GST and the impending Tax audit. Now with a Tax audit looming there was no way he was going into CRA’s offices alone (once bitten …). Some people think that bringing an accountant to a meeting with CRA is like bringing a lawyer to the police station. “It makes me look guilty”. But the truth is auditors are accountants who understand tax law. Why would you go talk to them alone unless you understand accounting and Tax Law. Bringing your accountant doesn’t mean you are guilty, it means you are prepared. Why not bring the person who prepared your return, or at least someone who understands taxes in general (if the preparer is not available). Having an accountant with you will ensure you are treated fairly, and that you understand what the CRA wants. You wouldn’t go to court without a lawyer, do not go to an audit meeting with CRA without an experienced accountant. It will cost you a few dollars, but it will save you many times more in stress prevention, and potential tax re-assessments.
One last point I will make is that not all accountants are created equal. Some have never had to deal with the CRA. This does not mean they are good, just that they are lucky. If you are looking for someone to help you with CRA get someone who has had lots of dealings with them. Interview the accountant and ask what issues they have dealt with and what the outcome was. Designations and education are important, EXPERIENCE IS ESSENTIAL!
If you need help call us at KD. We have the knowledge and the experience to solve your CRA issues.
About the Author:
Kevin Penner is a Certified General Accountant (CGA) and is a former CRA auditor with 15 years experience.