Our CPA firm regularly accepts new clients who have been notified by Canada Revenue Agency (CRA) that they will be audited for their business or home income taxes or HST Harmonized Sales Tax.
The CRA tax auditor will either review your records at his/her government office (“CRA office audit”) or at your home or office (“field audit”).
TAX TIP If you are selected for a tax audit, it is absolutely essential that you contact your Chartered Professional Accountant because it is very dangerous for a taxpayer to handle a tax audit alone without representation. Our CPA firm will assess the situation prior to the audit, will organize the information required by CRA and we will then meet with the auditor on your behalf. Please contact us now for professional advice concerning a tax audit to avoid costly mistakes.
The tax auditor will usually examine the following documents and information:
- information on file at CRA, such as your previously filed tax returns, financial statements, audit reports from previous audits if any, and
- your business and personal records including your bookkeeping-accounting ledgers, bank accounts, journals, sales invoices, purchase vouchers, expense accounts, online e-Commerce activities like PayPal, and possibly your social media accounts including Facebook.
The tax auditor will directly contact you and either request that you send specific records to his office, or arrange a convenient date/time to begin the audit at your home or office.
If a field audit is required, the auditor will present his identification card upon arrival. Before examining your records, he may want to discuss the general nature of your business or tour your premises to get a better understanding of the transactions recorded in your bookkeeping. Throughout the process, he may need to get information and assistance from you and your employees, particularly those who do your accounting.
TAX TIP Once a new client hires us to be their representative, we call the CRA tax auditor to book an appointment at his or our office weeks later. It is never a good idea for the audit to take place at the client’s home or place of business. CRA may have to see your home or office, however the entire audit is usually done at our office. Your accounting books and records should be organized in order for the audit to be completed quickly and result in a favourable outcome. Please contact us now for questions and advice concerning a tax audit.
June 15, 2018 Self-Employed Tax Deadline
Be sure to file your 2017 Self-Employed Individual Income Tax Return now to avoid costly penalties.
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