Small business owners tend to get scared upon hearing the word Audit. Most of them start to panic, because of their perception about external auditors and their rationalism. But Audit is the reality every business has to face at any point of time during its operation, and in a way, it’s good too.
So, what would you do if you received a notification from CRA Auditor? Okay, you can take a few hours, perhaps a day or two to come out of the shock. How will you respond to the notification? Will you ignore it completely? Or will you get panic and create a bigger mess than you already have?
You can talk to Canadian tax lawyers and ask for their assistance. They will help you understand the whole process and may offer you additional help, if required. In order to get prepared for such events or to take assistance, you can visit Barrett tax law for help.
Furthermore, follow these tips to get prepared for any such events in future:
CRA chooses businesses for audits in two ways:
So, it’s not an odd if you’re the “Chosen One”.
Don’t ever think they would leave you if you ignore their notification. In fact, you should call them to have updates and information about next steps. So, you can prepare yourself.
Don’t be too naïve to face them alone. They’re tax auditors and you have basic information about tax. It’s your right to have a Canadian tax law lawyer who could help you answer their questions.
By reading it, you can understand your rights and make your assumptions. For example,
Make their job easier and help them perform their job. It will make them happy and they may return the favor.
Audits don’t complete in days or weeks. Some may take more than six months. Even a desk audit, in which CRA reviews only one item, may take more than a month. You have to be patient with it.
CRA has your previous tax records. It will review your business and personal records. They may request for the records of other individuals, and check all the adjustments made by your accountant.
Audit starts as soon as auditors are permitted to enter the premises. They start by observing the human side, followed by a meeting with you (the owner), your tax advisor and the head of accounts.
Make sure you have your advisor so that he can explain the real meaning of the question asked.
If auditors inform you that you need to pay more, you can either agree and pay or disagree and appeal. To appeal you have to file an objection within 90 days after notice of assessment was sent.