Paying tax on any income earned is a legal requirement for individuals and businesses. There can be severe consequences for those who avoid paying their tax dues. There are proper taxation authorities for every country that deal with the payment and collection of taxes. For instance, the Canadian Revenue Agency is responsible for dealing with the taxation matters of the individuals and corporations in Canada. Therefore, it can be nerve-wracking for anyone to receive an audit notice from the CRA. No matter how carefully the returns are prepared, it?s difficult to imagine that an audit letter from CRA is anything but bad news.

What does a CRA tax audit entail?

Basically, a CRA tax audit involves a detailed investigation of the tax obligations of a party, which can be a business, individual or any organization. The purpose of the audit is to discover if the party has intentionally attempted to evade payment of taxes and whether it owes additional taxes or not. It is not very difficult to neglect making payments or mentioning all income on the federal tax return because some taxes are self-reported. A CRA tax audit is performed on businesses and individuals that are suspected of such negligence and for determining whether this ignorance is deliberate or an honest mistake.

Get professional CRA tax audit help

When an audit notice is received, individuals and businesses usually seek CRA tax audit help from experienced tax consultants. The consultants should be aware of the auditing process and what it involves. A team of skilled fact-finders and tax accountants is sent to help taxpayers that?s suspect of evading or underpaying taxes and they have the responsibility of sifting through the accounts and records of the party to determine the amount of tax that?s due. The auditors have complete knowledge of the different tax codes due to which it?s easy for them to figure out any discrepancies in the tax owed and paid. The final owed amount is usually determined by the auditor and this means that the party might have to pay more.

CRA tax audit targets

The CRA tax audit notice is typically received by those businesses and individuals that are suspected by the government for evading tax. They most likely owe additional taxes to the government. It?s usually large businesses and wealthy individuals that are suspected of paying lesser than owed taxes and they might need tax audit help for avoiding being subject to this process. However, the CRA tax audit can also be performed on random parties as the government doesn’t need any proof for carrying it out. There is no guarantee that a tax audit can be avoided completely.

When people seek CRA tax audit help, they will be told that some steps can be taken for avoiding a full-blown audit. Sometimes audits can also be resolved by mail and all the taxpayers need to do is to provide the tax auditors with the proper documents. A complete audit can be avoided in the future by reporting all the income earned on the proper forms and filing tax returns on time. Any cash payments and tips that have been received should also be reported even when there are no official documents. This CRA tax audit help from experienced tax consultants can prevent future auditing procedures for the business or individual.

You can not afford to delay and call for help as soon as you receive the CRA tax audit notice. Do not speak to CRA tax auditor to reduce the change that the information you volunteered will be used against you. Call Tax SOS right away for a free consultation at 1-877-982-9767.

As Canadian, you need to follow a voluntary tax system for income tax filing. ?This return is requested by the CRA annually.?It is commonly referred as the annual taxation or tax return.

CRA receive and handle the tax returns and provide taxpayers with notice of assessment. One of the most essential portion of this system is a requirement for the taxpayer to maintain the records which may be required in order to substantiate the tax filed.

Why CRA do the tax audit

The CRA or the Canada Revenue Agency is responsible to handle more than 25 millions of individual returns as well as corporate returns every year. Their prime jobs are to process these returns and to verify and assess the returns. Most of the time, CRA also looks for something abnormal in comparison to past tax returns filed by taxpayers.?Each year about one or two percent of the returns are chosen for the annual audit.

CRA can re-assess the tax return or known as CRA tax audit:

• In case of fraud or the misrepresentation, the CRA may reassess the tax return without time limitation.
• CRA can reassess the tax return at any time within four years after the first reassessment is sent.

The CRA can conduct desk audit where they may ask you for submitting the required documents that are related to the tax returns. CRA may also visit the business place of taxpayer in order to examine the records. This is also known as the field audit.

Apart from this the CRA has the authority to inspect and audit the books and the records that belongs to the taxpayers. They can even enter into the business premise to conduct the audit. If they find any resistance, CRA may issue a demand letter for submitting the information or the records.

CRA tax audit outcomes

The CRA auditors are also responsible to issue proposal of the tax audits. They have to compare the result with the original record for tax return. If they are sure that the original record for tax return have ?some errors, they may send the proposal letter. This proposal letter often includes suggestion to change the original tax return submitted and also asks the taxpayer to provide further proof. The proposal letter also includes a deadline to submit the required information. Generally, the CRA use to offer a 15 to 30 days deadline for collecting the information from the taxpayer.

From a taxpayer perspective, he or she is required to make some attempts in order to come to the resolution with the auditors from CRA. Usually, a settlement with the CRA officers can be done. However, it is important for you to know that dealing with CRA tax audit requires expert advice.

If CRA are not satisfied with the new information submitted by the taxpayers, then they may issue the reassessment letter.

The notice of reassessment means that CRA believe that there is an amount owing along with the interest.