CRA Tax AuditWhat To Do If You Receive a Tax Review NoticeI have just received a tax audit notice saying I'm going to be audited. What should I do? Before I begin, I want to let you know that at the end of this article, you will have the opportunity to share YOUR audit story. Use this search feature to quickly find the information you're looking for.  Custom Search This is over simplifying it but the basic steps if you receive a tax audit notice are:
Tax audits do not go smoothly if you are disorganized and don't have supporting documents to back up your claim ... in other your words, the accounting for your small business was done sloppily or by a person without sufficient knowledge. That's why you want to setup your accounting system to audit proof you and your business as part of your day-to-day operations. Small business bookkeeping is key. It's important to do it right and not wing it. A Very Scary Real Life Audit Horror StoryRead this story for just how bad CRA can make your life. This couple lives in my area.Have you experienced an audit? What did you learn that you can share about YOUR audit story? I obviously don't know the details except for what CBC interviews divulged. But I suspect a lot of little things went wrong (from leaving the tax auditor alone with his records ... to the tax auditor taking the records and then losing them ...) and they just kept building on each other. If he had found a way to pay the disputed tax liabilities while arguing his case, he would not have lost everything. The interest and penalties would have stopped and CRA would have had no reason to seize his assets and put them up for sale. In "The Current" interview, he said his bookkeeper was a professional accounting firm so I'm not sure why he didn't have them represent him during his audit ... but I may have misunderstood. Remember in the Canadian tax system, you are guilty until proven innocent. Your best defense is proving due diligence through accurate and honest bookkeeping. Although this was a situation where everything seemed to go wrong, CRA does convict for tax avoidance and tax fraud. They actually publish their convictions on their website. Just go to the Media Room. You will find a link to convictions under Media Products. If you have a professional represent you, they will look at prior year's returns for possible errors or omissions. They will determine your strengths and weaknesses and devise a strategy of how to approach the audit to your best advantage. You may want to take some time and read Understanding Tax Audits in Canada. I find when you understand the process, it is less scary. If you have kept a good set of books, tax audits are more of a nuisance that a worry.
Have A Great Story About A Tax Audit?
Do you have a great story about what happened when you were audited by CRA? Did you change any of your procedures after you experienced an audit? In hindsight, do you wish you would have done things differently from the start? Share it! These Pages May Be of Interest to YouGo to Understanding Tax Audits
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