Tax audit
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Tax audit

This topic contains 3 replies, has 2 voices, and was last updated by Avatar of Anthony Anthony 7 years, 11 months ago.

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  • #4719
    Avatar of kenphipps
    kenphipps
    Member

    The CRA has informed me that they want to do an audit of my business. How should I prepare for this?

    #4826
    Avatar of Anthony
    Anthony
    Moderator

    If you have never been through an audit before, it is definitely time to get help from an accountant.
    If you haven’t done anything wrong and all of your records are in good order, then the process will be relatively painless. The CRA just wants to make sure that information submitted in your returns is accurate. Sometimes they have reasons for performing an audit and sometimes you are just the lucky subject of a random check.
    Treat it as a learning experience and ask your auditor what you can do to improve transparency so as to avoid future audits.
    Fret not. Everything will be fine.

    #4882
    Avatar of kenphipps
    kenphipps
    Member

    What can happen if they find irregularities?

    #4887
    Avatar of Anthony
    Anthony
    Moderator

    If there were errors on your return, you might need to pay the difference, as well as any associated penalties. If the error was in the other direction (I.E. you overpaid), you would get a cheque for the difference.
     
    Auditors are very good at distinguishing between errors and intentional fraud, though they have been known to get a bit overzealous in some cases. Be fully transparent with your records and don’t try to conceal anything. If it seems like the Canada Revenue Agency is being abusive, get your lawyer involved in the process. Such cases are very rare. You shouldn’t have anything to worry about. Audits are normally complete as soon as your books and receipts have had a good once-over.

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