When do you require the help on CRA tax audit? Let us start with employer compliance. CRA pursues a whole range of issues that are connected with employer compliance like the remittance of source deductions on a timely basis, the establishment of worker status as either employees or independent contractors. It also scrutinizes aggressively the relocation costs and the taxable benefits.
You need a help on CRA tax audit when inquiries may be triggered if an independent contractor will try to seek employment insurance benefits. The status of the workers is an important issue. An inquiry that is related to a single worker may not lead to financial exposure but it can result in rulings for similar category of workers under the Employment Insurance Act. The Canada Pension Plan also comes into play.
The help on CRA tax audit of payroll account may also be required for enquiries into the taxable benefits that are received by workers such as the usage of employer assets, allowances, stock options, incentives and relocation expenses. These kind of audits may also bring about the possibility of the presence of non-resident workers on a temporary basis.
Another area that may push for the help on CRA tax audit is the inconsistency between the taxpayer’s filing position and third party information. CRA tries to match the information from the third parties and employers with the filing positions of a taxpayer to confirm the accuracy of the return that has been filed.
When the CRA requests for any information, it should be complied with care. It has to be managed carefully to make sure that the requirements of the CRA are satisfied without giving away more information than needed.
When there is a request for amendments to income tax or the GST/HST returns, it may attract scrutiny and a situation where you need the help on CRA tax audit. Some strategies that the CRA may dispute are the re-filing of returns for the previous taxation years that are done for the sake of carry back losses but without proper documentary support.
Your tax return could require a help on CRA tax audit if there are some unusual deductions or utilization of credits in it. CRA has a system of compiling data on credits and deductions that are claimed by the taxpayers over a period of time. Major changes in the pattern of deductions from one year to another one may attract enquirers. Those taxpayers who have a valid explanation for considerable changes will have nothing to worry about. It is those taxpayers who become a little aggressive in their tax planning who may be targeted for audit.
You will be asking for the help on CRA tax audit if you start using techniques like artificial capital losses, withholding of tax, interest deductibility, loss trading transactions and tax free savings accounts. Another quaint factor for suspicion is if the reported income in your tax returns is lower when compared to other residents in your neighborhood. Though it is illogical, CRA may still initiate some kind of assessment on your net worth by using tools to ascribe more income than shown to that taxpayer.