CRA Audit & Review Assistance

An audit or review from the Canada Revenue Agency (CRA) can be an intimidating and stressful experience for most taxpayers.

At Filing Taxes, we are proud to offer specialist CRA Audit/ Review support in Toronto, Mississauga, and across Canada.

We work with individuals and businesses in various industries to navigate the complexities and nuances involved in receiving tax audits and understanding CRA audit triggers.

With an increasingly strict and frequently evolving regulatory environment, having a steadfast partner to navigate the intricacies of CRA audit or review is a strategic advantage.

Overview: What is CRA Tax Audit or Tax Review

When the CRA conducts a business audit, they will want to examine your books and records to ensure that you have complied with legislation and received the exact amount to which you are entitled. If, after conducting the audit, the CRA decides that your return must be reassessed, your tax return will be amended.

CRA Tax Review – A tax review is a request for additional information if the CRA finds discrepancies in your tax return. The CRA may send you a Notice of Reassessment or call you asking for details about your business account.

CRA Tax Audit – 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.

CRA Audit Triggers: What Triggers the CRA Audit?

Every year, CRA randomly selects tax returns to review or audit. The CRA holds the power to audit or place under inspection any individual or business’s financial information and tax claims. The CRA would never explain the reason why they selected your business. This scenario is one of the main reasons why filing your taxes is important. It’s crucial to ensure that your bookkeeping and accounting are up to date before the CRA inspection begins.

The Canada Revenue Agency uses various criteria to determine who will be subject to a CRA audit. CRA audits are risk-based, meaning that the CRA will go after categories of taxpayers it believes to be at higher risk of tax evasion.

Your business runs primarily on cash transactions.
Your business expenses are higher compared to others in your sector
You belong to an industry that raises audit red flags (retail, construction, wholesale/distribution, food service, and manufacturing)
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)

No matter what the agency’s reason for examining your financial accounts is, you can sail through the audit process with our experienced Professional Accountants by your side.

CRA Audits Assessment Process

CRA audits in Canada will assess your previous personal or business tax filings to determine if there are any discrepancies. Personal CRA audits may include reviewing bank statements, mortgage documents, and credit card statements, while business CRA audits typically involve invoices, employee payroll information, GST/HST, and any business-related statements.

The CRA will contact you via phone, mail, or email to notify you of the audit. The initial notification outlines what tax year(s) will be audited, what documents are required, and the audit’s scope.
You then have the opportunity to make submissions that the auditor is required to review and respond to.
CRA auditors review submitted records and may cross-reference them against CRA’s data to identify any discrepancies.
After reviewing your submissions and documents, the CRA auditor may either determine that you are correct or that there is a problem.
If the auditor determines that there is a problem, you’ll get a “proposal letter” that sets out the proposed reassessment as well as the reason for it. You will have another chance to make submissions and provide documents to try to dissuade the auditor or change the proposed reassessment.
After reviewing your submissions to the proposal letter, you will be issued a notice or reassessment unless you manage to convince the CRA that their position in the proposal letter is not justified.
Once re-assessed, your only option is to either pay up or file a notice of objection to fight the reassessment.

Always hire a professional tax accountant to help you with an audit right from the start so that you stand the best chance of avoiding a reassessment or limiting its impact.

What Common Mistakes Do Taxpayers Make During a CRA Audit or Review?

The biggest single mistake is to deal directly with the auditor instead of through a professional tax accountant, GTA. The CRA auditor will take notes of every statement made and will sometimes accidentally or deliberately get the information wrong.

If you are being called for a CRA audit or review – Don’t Fight with the CRA Alone!

Our Assistance During Each Stage of The CRA Audit or Review

We have developed a plan of action to assist you at each stage (phase) of the CRA tax audit/review. The following are some of the activities we perform during our audit assistance engagement:

Initial Interview and Audit Preparation: We explain to you what to expect from the CRA, and we inform you about your rights and obligations. We immediately take control of the communication with CRA and recommend a strategy to deal with the audit.
Pre-audit assistance: We help you prepare for the audit by reviewing your financial records and ensuring that all necessary documents are to support your case effectively.
Issue Resolution: Strategic resolution of identified issues, addressing concerns raised by the CRA to achieve the most favorable outcome.
Audit representation: We represent you during the audit process, communicating with the CRA on your behalf advocating for your rights as a taxpayer, and making sure that the auditor’s actions are according to the CRA Audit manual and procedures. We regularly inform you about the audit progress.
Appeals: If the audit results in a dispute with the CRA, we can assist with the appeals process to help you reach a favorable outcome.
Compliance Guidance: Remember, the purpose of a CRA audit is not only to verify past tax filings but also to educate taxpayers to encourage future compliance, and to look for reasons to reassess your taxes and justify the audit. We offer ongoing guidance to help ensure your continued compliance with tax regulations and minimize audit risks in the future.

Why You Should Consider CRA Audit Assistance

In the event of a tax audit, the onus is always on the taxpayer to provide proof of self-reported income and deductions claimed. It’s quite overwhelming for individuals and businesses to go through a CRA audit or review on their own. During a CRA tax audit, it’s crucial to have professional tax assistance from an accountant with a history of representing clients during audits by the CRA to help navigate the process.

An accountant provides valuable help in organizing financial records, responding to CRA inquiries, ensuring that all information presented is accurate and compliant with tax laws, and, perhaps most importantly, ensuring you do not say or do anything that makes your situation with the CRA worse.

Why Choose Filing Taxes, CRA Audit / Review Assistance

If you’ve received a CRA audit letter, you need an audit specialist from Filing Taxes.

We provide comprehensive support throughout the audit process, working towards ensuring the most favorable outcome for your situation.

We’re a trusted resource for corporate and personal income tax accountants in Toronto and across Canada. We specialize in a wide range of tax solutions, including voluntary disclosure, tax consulting, and tax audit assistance.

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.

Reach out to our team if you have any questions or would like to get started! Filing Taxes provides Audit and Review Assistance Services, helping individuals and businesses deal with Notice of Reassessment and tax audits in an efficient and anxiety-free manner.