So you personally or your business have been selected for and audit? How to proceed in order to ensure the process goes as smooth as possible and to minimize any taxes owing as a result of the audit.
Firstly, when CRA selects a business or individual for an assessment they make note of a few items below:
1) The taxation year in question.
2) The type of assessment: a limited review ( which involves analysis, and inquires, and limited supporting documents), or a full audit ( which will include a review or certain sales and expenses details and required supporting documentation)
3) Any taxes owing as part of their assessment.
We always recommend when you get selected for an audit, do not simply answer and inquiries or provide any information until you fully understand what has been requested by CRA. Please confirm with CRA that you have actually been selected for a review. In the past few months there has been several incidents where fraud has occurred where people have called others claiming that they are CRA and requesting personal information. Please note that CRA does not call individuals to request information and they will issue a formal notice of assessment via the mail. We always recommend our clients call the CRA directly and confirm that this is the case prior to providing any information.
Once you have confirmed with CRA that you have been selected, the process will involve answering some inquiries and providing the appropriate supporting documentation for your claims made. Once the audit is closed, CRA will issue another notice or assessment with the result of the audit. Should you and your advisor disagree with the result you can proceed with a notice of objection for their assessment, this must be submitted within 90 days of the date on the assessment issued.
Our firm has extensive experience dealing with CRA audits and limited reviews, should you require assistance please contact one of our MP Group Advisors, we would be happy to help you with the process.