Posted by Support1 December 30 2013
Tagged Under : tax-audit
A tax audit is a complete analysis of the conditions pertaining to the tax returns which are submitted to the CRA by a taxpayer or a business. ?The impression that is projected by the very phrase, `tax audit?, brings to the mind anxious feelings even among those taxpayers whose tax documents may be in perfect order. A tax audit may can be a result of some irregularity in the tax returns or it may be as part of a casual sampling.
The CRA has the task of supervising the ?collection of taxes from both individuals and companies in Canada. Mostly, the Canada ?The tax returns are reviewed as a routine and minor errors may be corrected in collaboration with the taxpayer as part of the collection process involving a tax audit.
A few tax returns may be selected on a random basis for a tax audit as a part of the process of review. If this is the case, then normally there are no penal measures which are involved. The taxpayer has to simply present the copies of their tax returns which have been filed for the period in question along with any supporting documents. These documents are presented to a representative of the CRA.
A Tax audit may also become necessary if the CRA feels that there is a sufficient reason to believe that a tax payer’s deductions are not allowed. The CRA may feel that there has been a deliberate attempt to conceal income. ?In such a situation, the CRA will call for a tax audit to sort out the discrepancies. If the taxpayer comes out with sufficient proof that the initial tax returns submitted were correct and in order, then the CRA will accept the arguments. When the CRA feels that a tax deduction cannot be allowed, the tax return will be calculated once again and interest penalties could be applied to the taxpayer.
Even though a tax audit may be a routine procedure for the CRA, it could be an anxious phase in a taxpayer?s life. It could be a nerve racking moment for a taxpayer when he or she receives a letter from the CRA informing that their tax returns have to be audited. Many taxpayers are ?believe that the CRA may not know when they conceal their income, but the CRA has ways of finding out more about the Canadian taxpayers. They retain the information that is initially provided to them by the taxpayers and they can also gather additional information about a taxpayer from third parties that include financial institutions.
To avoid a tax audit, it is wiser on the taxpayer?s part to file his or her tax returns by the deadlines which apply. If money is due to the government, regardless of whether a taxpayer can afford to pay the taxes or not, it becomes a criminal offense not to file the tax returns. If the taxpayers wait around till the time they feel they can afford to pay their taxes, they may discover that the penalties for filing late may make it more difficult for them to do so.
For tax audit help, it is important to make sure that you have someone who is experienced and specialized in CRA tax audits. Call Tax SOS’ experienced tax team at 1-877-982-9767.