Tackling and Surviving a CRA Tax Audit

The best thing to do when you receive a CRA Notice of Assessment is to stay calm and deal with it.  You have to open all the brown envelopes that you get from the CRA. If you happen to receive calls from the CRA, you have to receive them without flinching or return them promptly if you have missed them. When you start ignoring tax problems, they do not go away. They come back strongly at you in the shape of a CRA tax audit.


CRA tax audit will generally be notified in a letter format. On some rare occasions, a telephone request would be made by the CRA. This letter will set out the details like the audit years or the auditor’s contact information. It would also include a list of papers that the CRA may wish to inspect and this could include your financial statements, copies of tax returns, schedules of depreciation or payroll records.


When you are going to be reviewed with a CRA tax audit, you have to respond calmly and submit all the information that is being requested. To be specific, if the CRA wants to review your travel expenses, they will set out a date for you to provide the necessary documentation to support what you have reported in your tax return. You have to make sure that you are able to meet the deadlines that have been set by the CRA tax audit. When you have all the necessary paperwork to support your case but you are tardy and late in sending the information, you will get your tax return reassessed without giving you the credit. You will have to go through filing an adjustment to make the claim once more.


As a taxpayer, it is not possible that you will be able to stay organized every time. Sometimes, you will not be able to find all your tax related documents at one place. But the fact remains that you have to submit all the documents that are required in a CRA tax audit. Your tax consultants or the CRA are not going to come around and help you in finding the documents. Any excuse about not being able to locate the required documents will not be accepted by the CRA.


One of the rules of the CRA tax audit is that if the review ends in a reassessment, it is wiser to pay the tax balances promptly so that you avoid interest charges subsequently. Any disagreement you have can be taken care after the payment through a Notice of Objection. Should the CRA reverse its decision your reassessment, you will get your money back.


It is better to take the help of the tax accountants to help you in these tax battles. If you feel that you are receiving unfair treatment from the CRA, you can lodge a complaint with the Taxpayers’ Ombudsman Office. This office will review all complaints related with service and make sure that the Taxpayers’ Bill of Rights is adhered to, even if it cannot change all the tax laws in your favor.