Overview of CRA Tax audit
If you find yourself facing a CRA Business Audit or review, there’s no need to panic. The CRA isn’t always correct, and an audit isn’t a death sentence. However, it’s crucial to ensure that your bookkeeping and accounting are up to date before the CRA inspection begins.
CRA Tax Audit vs Tax Review
A tax review is a request for additional information if the CRA finds errors in your tax return at the time of processing. The CRA may send you a Notice of Reassessment or call you asking for details about your business account.
A CRA Tax Audit is a detailed examination of your books and records to determine if you have fulfilled your tax obligations. If the CRA is not satisfied with your response to a tax review, they can audit you up to six years after issuing a Notice of Assessment or at any time if they suspect fraud.
SAR Professional Corporation, Chartered Professional Accountant provides Tax Audit Services, helping individuals and businesses deal with Notice of Reassessment and tax audits in an efficient and anxiety-free manner.
The Canadian tax system operates on the self-assessment principle, requiring taxpayers to report and file their taxable income. To enforce tax laws, the CRA conducts CRA Business Audits to review the records and documents that validate the amounts you reported in your returns.
When you are selected for reassessment, you have two options: accept the reassessment and pay the owed amount, or file an objection.
If you’re unable to pay the amount, interest charges will accrue daily until the full payment is made. Our Tax Audit Services can advise you on the right steps and help negotiate a payment plan with the CRA.
If you decide to challenge the CRA, ensure you have the supporting documentation and understand what you’re in for. Negotiating with the CRA can be challenging and stressful, considering you’ll be dealing with professionals well-versed in tax laws.
At this juncture, our Chartered Professional Accountants can provide competent support. We prepare the necessary documentation and apply our deep understanding of tax laws to negotiate an agreement that benefits you and is acceptable to the CRA. This is a key part of our CRA Tax Audit services.
Although audits of business accounts are quite rare, the odds of being audited increase in the following cases:
- Your business runs primarily on cash transactions
- You belong to an industry that raises audit red flags (retail, construction, wholesale/distribution, food service and manufacturing)
- Your business expenses are higher compared to others in your sector
- If the CRA suspects you have overreported home office expenses
- Your business is making recurring losses (every business makes losses – be sure to maintain updated and correct financial documents)
If there are huge discrepancies in your tax return, then CRA auditors will put you under audit. No matter what the agency’s reason to examine your financial accounts is, you can sail through the audit process with our experienced Chartered Professional Accountants by your side.
Payroll tax audit support
We review your payroll reports and check your financial records to determine if the amounts you’ve reported match those in the documents. The payroll auditing process typically involves an inspection of your ledgers, payroll deduction remittances to the CRA, sales invoices, and expense accounts. We assist in bringing all payroll records up-to-date and organizing them to make it easy for the auditor to find what they want.
GST audit support
In a GST audit, you will be asked to provide a number of supporting documents besides invoices and receipts. They include your general ledger, credit card receipts and a detailed listing of GST collected and input tax credits (ITCs) claimed, among others. After you submit the documents within the 30-day deadline, the CRA may request additional documents. With our GST tax filing and audit support, you can overcome non-compliance issues quickly and establish an efficient GST process.
Why choose sar professional corporation, cpa?
- We have successfully navigated numerous audit scenarios and dealt with both simple and complex CRA issues. Regardless of the scope of your audit, we can assist you in preparing for the process.
- Our effective representation during a CRA Tax Audit is far more cost-effective than the potential thousands of dollars in tax bills that the CRA may present you after scrutinizing your financial records.
- We provide comprehensive support throughout the audit process as part of our Tax Audit Services, working towards ensuring the most favourable outcome for your situation.
