Help with Canada Revenue Agency (CRA) Audit
A Canada Revenue Agency audit can be a very frightening and stressful situation. Knowing the CRA wants to take a second, closer look at your tax return, whether it is the entire return or just a portion of it, such as expenses claimed for meals, entertainment or travel, can be a very nerve-racking experience.
At MK & Associates, we never advise any taxpayer to represent themselves in a CRA audit, no matter how simple it may seem. Even if you honestly believe you filled your entire tax return out correctly, meeting with the CRA can be a very intimidating experience.
This is especially true if you have to experience a face-to-face audit. Traditionally, however, the majority of CRA audits are done via correspondence. In other words, most Canada Revenue Agency audits are in the form of letters asking for explanations of various tax items on a tax return or requesting supporting documentation.
More often than not, a CRA audit of a tax return will result in changes to the return. Whether these changes are good or bad for the taxpayer depends on the situation.
We advise that you hire a professional to represent you. When you hire MK & Associates, you can be comforted by knowing that our Tax Team has years of experience dealing with the CRA audits. You can face an audit with confidence when you know you have our Tax Team on your side.
Correspondence Audit is a letter from the CRA Service Center requesting that you send in copies of your canceled checks and/or receipts in order to verify certain deductions on the return. This type of audit is reserved for small, simple tax returns and most likely your business will not be audited in this manner.
The notice of an office audit also arrives by mail. The letter identifies specific items on the return that are in question and requests that you or your representative to bring certain documents to the local CRA office for the auditor’s examination. If your business is a small, sole proprietorship with sales under $500,000, you may be subjected to this type of audit.
With a Field audit, the CRA agent, personally, will call the owner/president/general partner and notify him/her that the return has been selected for audit. This type of audit is called “field” audit because the agent will want to conduct the audit at your place of business rather than the CRA office. Most incorporation businesses and partnerships are audited in this manner. During the initial telephone contact, the agent will be asking for the following:
- To interview the principals
- To arrange a date(s) to be at your place of business
- To determine where the records are located
- To provide a list of records that is to be made available
It is crucial that during a field audit, you have representation. The CRA agent is instructed to interview you and go to your business so that he/she can ask detailed questions about business operations and see the business facility first hand. We who handle CRA audits regularly call this a “fishing expedition.” Your representative will attempt to buffer you from this type of questioning and probing. More than likely, your representative will attempt to have the audit conduction in his/her office rather than your business.
If you owe money to the CRA, MK & Associates can Help!
Are you one of the thousands of Canadians with CRA tax problems? If so, MK & Associates may have the right solution. We understand that CRA problems have the potential of ruining every aspect of your life, if you let them. If you owe back taxes, the CRA may soon be sending you a notice to indicate garnishment of wages, your pension, your savings, and/or your property.
Now is the time to act, and we’re here to help you resolve your tax problems. Our Tax Team has successfully negotiated settlements for our clients, saving them thousands of dollars.
Settle Back Tax Debt
If you are one of the many taxpayers with back tax debt, we understand your fear. And, you are not alone. The CRA knows there are millions of dollars in unpaid back taxes, interest and penalties – and they are looking to collect that debt.
Many taxpayers fall behind in paying their taxes for any of a variety of reasons major health issues, divorce, job loss or loss of income. Small business owners may get behind in payroll taxes, which can quickly escalate into a large tax debt, including the interest and penalties the CRA assesses. The amount of tax owed can quickly add up to an amount you fear you will never be able to pay, so you quit filing your returns and hope the CRA does not notice.
Maybe you’re worried that coming forward will get you into more trouble. Maybe you think if you come forward, you will find out the amount you owe will end up being even larger than you imagined. Or you think if you keep quiet, the CRA might overlook you. Wrong.
Not doing anything is about the worst thing you can do, but what many taxpayers don’t realize is just about everything is negotiable with the CRA – if you have the MK & Associates Tax Team on your side.
CRA does not make up the rules, and understanding the law is the first step. There is always a chance that CRA may audit your return. Makes sure you never have to meet with the CRA agent alone. We can assist you with your:
- GST/HST audits
- Income tax audits
- Defend your return in a review request
- Schedule & attend all audit appointments
- Review your tax return for additional problem areas
- Review your documentation before the CRA sees it
- Handle all audit correspondence
- Provide assistance with all other income tax queries or correspondence