Tax Returns Review at the Canada Revenue Agency
With each passing year, the number of taxpayers who file their income tax and returns through online mediums such as NETFILE or EFILE is increasing at a rapid pace. While it is a fact that the taxpayers do not need to submit the receipts online, it is in your best interest to keep a proper record of all the receipts, documents and financial statements. While reviewing the returns, the CRA can ask for specific receipts and documents.
You must be prudent while filing your tax returns. This is especially crucial as the CRA indulges in several reviews of each return filed to ensure that there is no discrepancy in the income, deductions and the credits that are reported and filed.
Some review programs have been employed by the CRA to verify tax returns. These programs typically include pre-assessment review, processing review, matching & audits which will be discussed in a separate audit page.
Pre-assessment Review Program
Under this review program, electronic analysis of returns is performed by the CRA. This is done to identify situations that pose high tax loss potential.
Processing Review Program
Returns reach the processing review program only after a notice of assessment is issued to the taxpayers. Under this program, the returns are checked to confirm if the deductions and claims are accurate. The genuineness of the documentation is also checked in this program.
As the name suggests, this program ensures all the slips and documents filed by third parties correspond accurately with the information provided by the taxpayer.
Need for Adequate Book and Record Keeping
The CRA monitors small businesses that don’t keep appropriate records and financial statements. CRA wants to make sure that small businesses have claimed legitimate business expenses since businesses are taxed on profit and not on gross business income, and this provides an opportunity to inflate the expenses.
How We Can Help You
If you are facing issues associated with CRA verification, then we can help you. We know exactly what is required as far as reporting is concerned. We are seasoned tax professionals and we can calculate what can legally be deducted. Now it is possible to get rid of all your tax-related concerns and problems, call us right now at (416)623-9234 or 877-982-9767 or fill out the Contact Form!