What To Expect When You’re Expecting (An Audit)
I’ve Been Selected For an Audit—Now What?!?
The Canada Revenue Agency (CRA) performs many audits of personal and business taxes each year, and you may be selected for their close scrutiny. This is not the end of the world, and it does not mean you have done anything wrong. The CRA does audits to ensure that all taxpayers are playing by the same rules, and to maintain taxpayer confidence in the taxation system.
A note regarding tax and audit scams—the CRA will NEVER call you and threaten you with heavy fines and jail time out of the blue. An audit is a process that you go through with an auditor from the CRA; they will work with you and inform you of their findings, if you have been re-assessed and need to pay more taxes. If you receive a call that seems like a scam, call the CRA at 1-888-495-8501 and find out for sure before paying anything or giving out any information.
The Audit Process Itself
The first step in a possible audit is a tax review. This is the most common interaction people have with the CRA—the CRA contacts you with a request for more information and back-up documentation. If you have been a diligent record keeper and you respond quickly with the information the CRA is looking for, this will likely be the end of it. If Shaw & Associates Chartered Accountants have been doing your taxes, your first step is to call us to handle this for you.
The next step is the formal audit process. The CRA will be looking for information and documentation, and they will come to a formal conclusion about your taxation situation. They will create a proposal for you, where you are assessed as no changes required, having overpaid (in which case you will get a refund), or having underpaid (in which case you will need to pay the additional taxes immediately or face fines and/or penalties). You can also file an appeal after the CRA has finished your audit.
We’ve Got You Covered
If you are already using Shaw & Associates for all your accounting, they will deal with the CRA and the audit on your behalf. If you aren’t a client of ours, we can still represent you through the audit process.
The quicker you respond to the CRA, the better. Information requests or formal audit proceedings won’t go away if you ignore them; you could make matters worse for yourself, though, by accruing penalties, interest owing, and losing the goodwill of your auditor.
Shaw & Associates will also be able to tell you if your audit is straight-forward enough to be handled by an accounting firm, or if you will need to get a tax lawyer involved. Any way you look at it, talking to a tax professional like Shaw & Associates if you have been selected by the CRA for closer scrutiny is a very good idea.
Contact Shaw & Associates Chartered Accountants for accounting help you can count on. One complimentary meeting with us will put you and your business on a more profitable and positive path.