CRA or Canada Revenue Agency is the government organization that keeps a tab on your income and tax responsibilities. If they think that you have been less than truthful or trying to dupe the authorities or simply not following the rules and regulations properly, they can create a huge problem for both individuals and businesses alike. As the owner of a small or medium-sized business, it is important that you keep a clear tab on the expenses and earning of the business and also proper preparation to deal with the CRA tax audit if you are notified about the same. It is possible that you may not come under the radar of CRA in this financial year, but it is not guaranteed that it won’t be happening in the coming years. So, remaining informed about the CRA Tax Audits, Problems & Representation will be a smart move indeed.
Some Information On The Subject – If you have received a notice regarding the CRA tax audit, then there is no need to panic. You need to first make sure that every receipt regarding every expense and purchase an all the required papers are ready. If there is something wrong with the records you do not have the required documents, then things can get really ugly for you, otherwise, there is no reason to worry. The first thing you need to know that the CRA or Canada Revenue Agency is not going to come to your office one day suddenly and ask for all the financial records of your business. You will first be notified about the audit and informed about the date and time of the audit happening.
It is possible that you will have to take all the records and visit their office for the audit, but in most of the cases, representatives are sent to your office to conduct the audit. Once the audit is done, your records will be submitted and the authority will go through that. If they find no discrepancies and are satisfied with the information you have provided then you will get the results back and there won’t be anything to worry about. On the other hand, if something is discovered and CRA is not satisfied with the financial records you provide, then you will have to pay the fine. You will be informed about the fine and the amount payable as well. This may seem to be the end of the things, but that is no true. If you are not satisfied with the audit and think there are problems, then you can fight the decision of the CRA and ask for reassessment as well. There are professionals who will be able to help and represent you in the court. All you need to do is gather information on CRA Tax Audits, Problems & Representation, work carefully, understand the requirement of legal representation, and make the right decisions at the right time. Hence, dealing with CRA audit and the aftermath will become easier.
As a business owner, especially of a small or medium-sized organization or as an individual contractor, you are more likely to be audited by the CRA. So, along with being prepared by hiring an accountant or relevant services, having a clear idea about what the audit process entails will help you to handle things better. Searching the internet will be quite helpful to gather information on CRA Tax Audits, Problems & Representation in North York Ontario, as there are thousands of websites which will provide the required information. All you need to do is go through the site and the information it is providing.
Details Of The Process – During this research process you will come across the following information describing the steps of CRA tax audit, and they are:
- The audit process is crucial to the CRA or Canada Revenue Agency
- The aim of this process is to create a fair tax paying system for the citizens
- The audit will commence when the CRA auditor contacts you through phone or email or both and inform about the audit to be taken place
- The representative of the concerned authority will inform you about the date, time and place of the audit
- The on-site audit takes place at your home or business or at the office or your representative
- Upon arriving, the auditor will provide a valid ID and then start the audit
- During the audit, every book and record of the taxpayer will be examined closely
- The audit process includes checking the books along with asking questions
- If the audit is not on-site, then it will happen at the office of the concerned authority
- If you are assigned an auditor and he/she is situated outside your region, then he/she will ask you to either bring or electronically send the supporting documents
- It is possible he/she will borrow some of the documents but only after informing you and providing relevant receipts with the promise of returning them as soon as they can
- During the audit, all your financial records including both business and personal will be checked thoroughly and along with the records of your family members, if required
- If the auditor is satisfied, then the audit will be closed and you will receive a completion letter
- If the auditor finds that, you owe more tax or deserve a refund, then a reassessment will be done and the next steps will be decided
Knowing these points will help you to prepare for anything related to CRA Tax Audits, Problems & Representation in North York Ontario and help your business further.
The first thing you need to know about CRA tax audit is the simple fact that, you cannot possibly know when you will be audited. If your business is to come under the inspection, it will happen once you have been informed by the concerned authorities regarding the matter. So, the only thing you can do is research and gather information about CRA Tax Audits, Problems & Representation in North York Ontario and the ways of dealing with the problem. This way, you will know about the professionals who can help and hire one when required.
The triggers to know about – During your research, it will become clear that despite not seeming so, CRA audit does function under rhyme and reason. This is why; there are a few actions which can trigger such an audit for your business. Knowing about these trigger points will help, but the whole matter to tax is an area full of complications. Hence, despite having the knowledge, you will always need help from a capable professional. The triggers that you need to keep in mind are:
- Making unreasonable claim of expenses is a sure shot way of getting noticed by the concerned authority and ensure CRA audit. Always make sure that the expense claims made are not very high and are effectively proportionate with sales.
- Using rounded-off totals is a huge triggering factor for CRA audit. If you provided rounded numbers as totals, then the concerned authority will know that, proper records are not being kept and you most likely do not have all the receipts. Using exact amounts will be less feasible to trigger an audit.
- It may be easy for you to forget a T-slip, but CRA does not forget such things. They tend to charge you 10% penalty the first time and for the next times, the penalty will be 20%. So, being extra careful and not missing anything is another way to avoid the audit.
- If your business falls under restaurants, construction or small retail category, then you have a good chance of getting audited. Keeping this in mind and being extra careful mostly does the trick.
- Paying unusually high spousal or children salary and reporting business loses for year after year will have a great chance to trigger a CRA audit for your business. So, do not take these shortcuts and roundabout ways of saving tax.
- Being self-employed or working as an independent contractor will increase the chance of getting audited. To stop that, you need to declare all your income or clearly state and prove that you are indeed self-employed and not an employee looking for more tax breaks.
Knowing about these points and taking the preventive measures will help you to deal with CRA Tax Audits, Problems & Representation in North York Ontario successfully emerge victorious.
When you are running a business, there are loads of areas which require special attention and finances is one of the most important in that list. Along with earning money and spending it in various areas including development of the business, you need to pay a certain amount to the authorities as the tax. It may seem like wastage of your hard-earned money, but if you do not pay taxes, things can turn really complicated for the business. Therefore, preparing for tax audits and gathering information on CRA Tax Audits, Problems & Representation in North York Ontario will prove to be beneficial.
Learning The Realities of CRA – It may feel a little silly, but in reality, the process of the tax audit is quite a frightening one. If anything is amiss in your finances, or you have been evading tax, then the result can cost you huge fine and other complications. The auditor will ask for the accounting books of your business and receipts for every expense. If anything seems to be untoward or the auditor cannot find a receipt or the calculation doesn’t make sense, then you and your business will face problems from the authorities and the outcome won’t be nice. Hence, if you have a clear idea about the CRA Tax Audits, Problems & Representation in North York Ontario and how to deal with that, then things can be managed perfectly.
Knowing Will Help You Take The Right Decision – Tax evasion may seem beneficial and the best decision for making more money initially, but when you will have to pay 50 – 200% of the evaded sum as fine, things won’t seem so nice anymore. If you ignore the CRA audit notice and other communications, things can turn rather unpleasant. Another important thing you need to remember in this context is the fact that, for the CRA process, you need to fill a questionnaire and if any information given there turns out to be false, even by omission or due to some error, you will be the one to suffer the consequence. So, as soon as you are contacted by the CRA, it will be wise to hire a competent and reputed professional who can help you with this. Having required information and in-depth understanding of the CRA Tax Audits, Problems & Representation in North York Ontario will help you to make the right decision and help you and your business.