Audits & Appeal
Audits & Appeal
Corporate Income Tax Audit & Appeal
What puts me at higher risks?
- You are reported for misconduct by a named individual or anonymously.
- Cash income
- Mixing personal incomes and expenses with business
- Deduction of large or unexplained business expenses
- The number of your business income is significantly above or below the industry average.
- Discrepancies in payroll tax returns or late submission
- Discrepancies in GST/HST returns or late remittance
If the CRA raises an eyebrow at your tax report, an auditor will inform you by phone. A proceeding email will be sent to you to confirm the details of the audit.
What the auditor would like to see?
- Incorporation articles
- All the pertinent business records, including but not limited to logbooks, journals, receipts, invoices and bank statements.
- Personal financial records, including but not limited to personal accounts, bank statements, mortgage or property deeds.
- Records of related persons, such as a spouse or common-law partner, close relatives, business partners, or shareholders.
Aside from the litany of documents listed above, the CRA auditor may delve into your case by seeking a second opinion. Your accountant(s), bookkeeper(s), or other employee may be required of their presence to provide information related to your tax returns.
What comes afterward?
- A reassessment from the CRA that rules how much you owe in taxes, penalties and interest
- You need to respond to the CRA, either to accept the penalty, or to appeal, within the given timeframe
- This may lead to other audits from the HST or payroll department.
Having said that, we DO STRONGLY recommend you to take precaution from the start and plan early. Book a consultation with us today to learn more about tax planning!