CRA TAX AUDIT IN CANADA
Are You Being Audited for Your Personal or Corporate Taxes?
When facing a CRA audit, you don’t need a tax lawyer. At Faris CPA, we’ve been providing CRA audit assistance and saving taxpayers unnecessary legal fees for over a decade.
If you want to avoid a corporate or personal tax audit in Canada,
call us at 1 844 340 5771.
GET YOUR TAX PROBLEMS SOLVED BY FARIS & TEAM
Tax Audit Experts in Canada
At Faris CPA, our clients can feel confident they will receive what they are entitled to from the CRA and won’t pay a penny more than legally required.
With over a decade of experience in accounting and tax specialties, we understand the importance of ensuring your personal or professional finances are in order, and that starts with a licensed income tax audit specialist.
As experienced and compassionate tax accountants in Canada, we work closely with our clients to ensure their financial records are accessible and organized before submitting their yearly income tax reports. A tax lawyer will need to hire a tax expert CPA to assist you with a tax audit. Work with Faris CPA directly to avoid the unnecessary legal fees that come with a tax lawyer.
With the help of a Faris CPA tax audit specialist in Canada, you can rest easy knowing that your financial affairs are in capable hands.
Minimize Stress During Your CRA Audit
Let Our Experts Help!
CRA TAX AUDITS
-
Tax Audits
In Canada Tax audit procedures are designed to ensure the Canadian tax system is fair and balanced and that all Canadians filing their taxes are following current tax laws and receiving their entitled benefits and refunds.
CRA tax audits in Canada will assess your previous personal or professional tax filings, to determine if there are any discrepancies. Personal income tax audits may include reviewing bank statements, mortgage documents, and credit card statements, while business audits typically involve invoices, employee payroll information, GST/HST, and any business-related statements.
-
During a CRA Tax Audit
When a tax audit in Canada is initiated by the CRA, an auditor is assigned to your case to review all personal or professional records or the records of another party that is not under investigation, including spouses and children.
Your auditor will contact you by phone or mail with the time, date, and location of the audit. In some cases, tax audits in Canada are completed on-site at your residence or place of business, while others will take place off-site at a CRA office. During this time, your auditor may ask for copies of physical or electronic documents pertaining to invoices, receipts, bank statements and other relevant information.
Once a CRA tax audit in Canada is complete, there are two potential outcomes — reassessment and no reassessment. Reassessment means there are additional taxes that must be paid, or you’re entitled to a refund, and you’re presented with a letter detailing the results, which you can agree or disagree with within 30 days. No reassessment is announced when an auditor determines there are no discrepancies in the original filings, and no further action is required. When faced with a tax audit, Faris CPA is well equipped to assist you, removing the need for a tax lawyer.
-
Find Tax Audit Help in Canada
At Faris CPA, we work with individuals and businesses across Canada to provide tax audit consulting services that produce real results.
We offer a selection of customized tax and accounting services to suit your needs. Whether you’re dealing with GST/HST audits or income tax audits in Canada, our accounting specialists will work with you to ensure your books are in order and any financial adjustments are submitted to the Canadian Revenue Agency.
Our team is dedicated to our clients’ financial well-being and will work tirelessly to deliver results you can trust.
Experience high-quality tax audit solutions in Canada today.
-
Tax Audit Updates
2021: As part of the 2021 budget, the federal government proposed amendments to section 231.1 of the Income Tax Act to broaden the CRA’s powers during a tax audit.
2022: The aforementioned amendments proposed in 2021 were enacted in Bill C-32 and came into effect on December 15, 2022.
With these changes, CRA auditors can now compel anyone to answer, “all proper questions” and provide “all reasonable assistance”. Further amendments in subsections 231.1(1)(d)(i), also allow the CRA to require that the person attend “any place designated by the CRA” or any other form of electronic communication to undergo oral questioning.
Prior to these amendments, taxpayers were generally speaking: the only ones subject to questions, could answer them in writing, were provided questions in advance, and had to give consent for other parties (e.g., employees or advisors) to be interviewed by the CRA.
The changes to the ITA now empower the CRA to compel taxpayers and anyone else related to the matter to be orally interviewed – making it necessary to have professional representation during a CRA audit.
2024: As of 2024, the CRA has not updated tax audit regulations and processes. That said, however, there have been some important tax reporting updates to be aware of to help avoid triggering audits:
- If you do not pay taxes owing by the deadline of April 30, 2024, for the 2023 tax year, you will be charged a compounding daily interest rate of 10% of taxes owing, plus an additional 2% for every full month of non-payment to a maximum of 20 months.
- If you file your taxes late and have a balance owing, the late-filing penalty is 5% of your 2023 balance owing, plus an additional 1% for each full month that you file after the due date, to a maximum of 12 months.
- You will not be eligible to claim the $500 COVID work-from-home expenditure for the 2023 tax year. In addition, the Canada Worker Lockdown Benefit (CWLB), which provided short-term financial assistance during the pandemic, expired in 2022 and is not eligible for deduction from taxes in 2023. The Ontario Staycation Tax Credit was only available for the 2022 tax year; it was not extended to the 2023 tax year.
- In response to rising inflation, the federal government has adjusted its tax brackets for the 2023 tax year. Here are the new brackets and corresponding personal tax rates:
- Income range: $0 to $53,359 (15%)
- From $53,359 to $106,717 (20.5%)
- From $106,717 to $165,430 (26%)
- From $165,430 to $235,675 (29%)
- $235,675 or more (33%)
Visit the Government of Canada website to stay up-to-date on these and all other tax changes, remain compliant in your tax reporting, and avoid a CRA tax audit.
Faris CPA’s clients rest confident that they will receive what they are entitled to from CRA and not pay a penny more than legally required.
M.W., BC – Client
”Sam’s team helped with my audit and cut my bill significantly. I saved thousands of dollars. Sam and his team were great.”
Call us today at for a Confidential Initial Assessment about any accounting or tax matters. As an experienced, certified, licensed, and expert tax accounting firm we help our clients handle all tax and accounting issues. Give us a call today at 1 844 340 5771.
TAX AUDIT CASE STUDY
A new client of ours had been audited by the CRA. It was discovered that their previous accountant had made many errors and had made many adjustments to their tax records. This company needed someone who could fix their books, records and amend 3 years worth of personal and corporate tax returns.
Our firm took over the file and started working on their books from the beginning. Corrections were made throughout the company’s books and records. Corrections were also applied to 3 years worth of personal and corporate tax returns. These adjustments were submitted to the CRA and the results were very favourable for our client.
This client has continued to use our firm for handling their business and personal financial affairs.
“Sam is a solid character with high standards and ethics which make his firm excellent.”
HIRE AN EXPERIENCED CPA FOR A CRA GST/HST AUDIT
Faris CPA is proud to be a certified tax accounting firm with over a decade of industry experience and expertise. We help individuals and businesses assess their accounting needs through a selection of licensed services, including our specialized income tax audit assistance.
When it comes to your personal or professional finances, you need tax audit specialists in Canada you can trust.
As an experienced, certified, licensed, and expert tax accounting firm, we help our clients handle their pressing tax and accounting issues. Give us a call today at 1-844-340-5771 for a confidential initial assessment about any accounting or tax matters.
On The Blog: More Tax Audit Resources
Other Services
Faris CPA is proud to offer a wide variety of tax-related services, not limited to:
FAQS
What is a CRA tax audit?
CRA tax audits are carried out by an auditor that has been assigned to examine your file. Using historical data, the CRA is able to determine who is most likely not to be fully compliant, either because of common errors or deliberate acts of tax avoidance. During the audit, your financial statements and records are examined with the aim of checking whether you have paid the correct level of tax.
I’m being audited by the CRA. How do I stop the audit?
Once an audit is started you cannot stop it. You can hire a Certified Professional Accountant who specializes in tax problems and who can ensure your rights are protected and that any taxes and/or penalties can be minimized.
How can a tax audit professional help me?
No one wants to be the recipient of an audit by the CRA, but it’s far worse if you don’t get a CRA tax audit specialist to provide assistance. Your accounting specialist can help you prepare all the necessary paperwork and to navigate this situation so that you feel as comfortable as possible and know all avenues available to you as the audit unfolds.
Dealing with CRA tax audits in Canada is incredibly stressful and can end up being very expensive. A professional accountant can help you through this process by saving you time, money, and giving you peace of mind. A tax audit professional can help by getting audited financial statements organized and reviewing them, which can help you win your case against the CRA.
What happens when you get audited by the CRA?
When you get audited by the CRA, you send the records asked for to the auditor. They use them as well as bank and other financial statements to assess whether you have paid the right amount of tax. Sometimes they will also access the financial records of individuals you are close to, such as a spouse. Provided everything is as it should be, you will receive a completion letter. If not, you will receive a proposal letter.
What is the tax audit process
You will be notified if your tax record has been selected for an audit. You will be informed by phone, through the mail, or through both, about the date and location.
During a tax audit in Canada, the CRA assigns an auditor to your case. They then tell you which records to send them. Your auditor will also be able to access information relating to your bank accounts, credit card statements, tax records and other relevant information. They may also access the financial records of people you are connected to financially or close to, for example trustees. Once your auditor has checked everything, they will tell you the outcome of their audit.
An on-site audit will usually take place at your personal residence. It is best to be as organized as possible when this is scheduled and have all your paperwork set up to go since this will make the process faster.
Having a tax audit assistance professional help you sort through this information is key to protecting your interests. Electronic copies of your paperwork might be made; if any of your documents are taken you should get a receipt for these. Auditors cannot receive information from you over email, but there are possible secure options for you online.
What are the red flags that might cause the CRA to audit me?
Some of the issues that flag agents are revenue discrepancies, recurring losses, there are major changes from the previous year, what you’re reporting does not match what the CRA is getting from third parties, and more. It can be difficult to tell which issues prompted auditors to look more closely at your file.
What are my options when faced with a CRA audit?
One of the options someone has when they are faced with a CRA audit is they can challenge the audit. You need to have strong evidence in your favour and the support of an experienced professional tax audit assistance team to navigate challenges like this. You also have the right to appeal the outcome of an audit.
Can I challenge a net worth audit?
The CRA can perform a net worth audit to determine what they believe your underreported income is. Challenging a net worth audit should be done by a professional who has in depth understanding in this type of audit, strong analytical skills and who has disputed this type of audit with CRA for many years in order to minimize any taxes that CRA is asking you to pay.
What can I do to reduce the chance of being audited by the CRA?
Using a tax audit professional early on helps you ensure that your returns and information are being sent in properly. Having a CRA audit lawyer at your side who does audit assistance is also helpful since this person will likely challenge what the CRA is saying.
Filing all your income tax returns on time is another way to show compliance with the tax laws and minimize your chances of an audit in the future. Since anyone can be subject to a tax return audit, it’s worth having help at your side just in case.
If you are audited by the CRA, having easily accessible books, and documents to support your claims will make it easier to show that you submitted the accurate information to begin with. The CRA is looking for discrepancies, and showing that you have kept things orderly and supported by outside professionals makes it easier to broach this process.
How long does an audit take?
An audit can take anywhere from a few weeks to months or even years, depending on the complexity of the information involved. Being organized on your end can make the process go faster, but there will also be delays if you challenge what the CRA says.
Does the CRA review every tax return?
While the CRA does process every tax return, this does not mean they audit every tax return. Due to this, you should always be aware of the potential to be audited by the CRA.
Can you negotiate with CRA?
In some cases, you can appeal to what the CRA says. However, you need a savvy tax audit professional at your side to help you determine when there are other options available to you and how you can use them.
