How to Face a CRA Audit?

Did you get a letter from Canada Revenue Agency (CRA), requesting supporting documents for your Income Tax Return? It does not say explicitly that you are being audited, but actually, your return has been selected for a random audit to see compliance with Canadian Tax Laws.

CRA usually have all the information regarding your income, in their database. Because by law, in Canada every company is required to send CRA a statement at the end of the year, of taxable payments they made to all employees and/or individuals.

Sometime, your income tax return may raise a audit flag for some information, or you just might be randomly selected for an audit. It should be a matter of concern for taxpayers, if you are selected for an audit. Because you don’t know, why you are being audited. After the audit, they may re assess your tax liability and send you a bill for additional taxes with fines and interest.

If your return is done correctly and you can provide all the supporting documents, usually there is nothing to worry about. Working with CRA auditors, I have personally found them to be friendly, courteous, knowledgeable and sympathetic to taxpayers.

If you want to face the CRA audit on your own, you sure can represent yourself to CRA. In that case, the auditor knows that you are not familiar with audit procedures and policies and probably you did your income tax return with off the shelf tax software. He already has advantage against you and can overwhelm you with complex questions about your tax return and in the end, send you a new tax bill.

It is always a prudent decision to work with an experienced, professional tax advisor when being audited. This decision can mean thousands of dollars savings for you and peace of mind. Consulting with a professional can be expensive, but your return on investment is many times of the money that you will spend for the advice.

A professional tax advisor who has handled audits in the past won’t be intimidated by the CRA auditors. Also, they are familiar with CRA’s audit proceeding and can answer correctly to CRA’s complex audit questions.

We have successfully represented our clients to CRA auditors and the peace of mind our clients experienced is priceless, knowing they are in good hands to deal with CRA