It has happened. That thing that you never thought would happen to you. It is stressful and time consuming and a downright pain. What are talking about? The dreaded tax audit. If you’re in this situation, wondering how this happened and what to do about it, don’t fret; we are here to help with 5 tips for a headache-free tax audit. Read on…
First of all, the why. While there are some things that act as triggers for an audit, random spot checks are common as well. The Canada Revenue Agency will call for an audit if inconsistencies in the information you submit when filing are found or if there are differences between the data you submit and that of the people you deal with. Whatever the reason, once you receive notice that an audit will be conducted, here are some tips to help make the process as smooth as possible.
- Get in touch with a tax professional. Before you start running around like a chicken with its head cut off, call in the experts. A tax professional, especially one with real CRA experience (such as an ex-auditor) can help you get things together and protect you throughout the process.
- Get your documents in order. When the auditor arrives, one of the best ways to get them in a bad mood right off the hop is to hand them a shoebox full of paper and say ‘good luck’. Instead, work through all the required paperwork for the years being examined, and categorize it. If something is missing, track it down through all available channels.
- Be honest. If the auditor asks a question, don’t skirt around the truth. Answer the question to the best of your ability. If you don’t know something, say so. If you do, even if it seems problematic, say so – chances are they will find out everything they want to know regardless, and being less than honest can just lead to issues down the line.
- Provide only the information asked for. Above we said to be honest – and we stand by that – but at the same time don’t try to be overly helpful by providing extra information that has not been requested. The less an auditor has to dig through, the less there is to complicate matters.
- Don’t be afraid to appeal. If you receive the assessment following the audit, but don’t agree with it, know that you have options. You can file an objection within 90 days of receiving the assessment, so make sure that you do so right away. Be prepared to back up your reasoning.
Want some backup? At Tax Solutions Canada, we know the ins and outs – after all, many of our team members are ex-CRA auditors! We can help you get things sorted before the big day. Get in touch today: 1-888-868-1400.