CRA Audit Assistance

A brown envelope from the Canada Revenue Agency can sit unopened on a kitchen table for days. When people look for CRA audit help, they usually want to know what the letter means and what to do next. Infoetax offers CRA audit assistance: CRA correspondence, audit preparation, document organization, and guidance throughout the review process. We can’t predict how a review or audit will end, since that decision is the CRA’s, but we can help you respond to it in an organized way.

What we do when a letter arrives

• We organize and review your documents.
• We help you understand CRA requests.
• We focus on accuracy and compliance in what is sent back.

A review is not the same as an audit

The CRA runs a number of review activities every year, and its own review pages say a review of your return does not represent a tax audit. Most personal-return letters come from one of the review programs. A few of the common ones:

• Pre-assessment review: the CRA checks income, deductions or credits before it issues a notice of assessment.
• Processing review: a similar check that happens after the notice of assessment has been issued.
• Matching program: the CRA compares your return with information from third parties, such as employers and financial institutions.

An audit is a closer examination of the books and records behind a return, and it is more common for businesses and the self-employed. An auditor may look at sales, expenses, HST, payroll or a corporation’s year-end. Our guide on what to do if the CRA reviews your return walks through the review side step by step.

Read the letter for its deadline

Every CRA letter carries a deadline, and the CRA asks you to reply within the time frame it sets. Look for the reference number in the upper right corner and include it with anything you send. If you need more time, the CRA’s guidance is to call the number at the bottom of the letter. Where a receipt is missing, the CRA asks for a written explanation in its place. Documents can generally be uploaded through your CRA account, and the CRA’s responding page explains how.

How far back the CRA can go

The CRA can generally reassess a return within its normal reassessment period. According to the CRA’s audit manual, that period is three years from the mailing date of the original notice of assessment for individuals, most trusts and Canadian-controlled private corporations, and four years for mutual fund trusts and other corporations. The CRA can go beyond it where there was a misrepresentation attributable to neglect, carelessness or wilful default, or fraud, or where the taxpayer filed a waiver. Some situations, such as certain foreign reporting, extend the period as well.

If you disagree with a reassessment, there is a formal objection process with its own deadlines, which are set out on canada.ca and printed on the notice.

Representatives and authorization

If you want someone else to deal with the CRA on your behalf, the CRA needs your authorization first. For businesses, the CRA describes adding a representative in My Business Account using the representative’s RepID, GroupID or business number, or confirming a request the representative starts through Represent a Client. Paper forms also exist, such as AUT-01 for individuals and RC59 for businesses, for offline access. Some programs send their requests directly to the taxpayer even when a representative is on file, so the taxpayer’s own mail still matters. The CRA’s page on how to authorize a representative covers the options, and we can talk through how it works for your situation.

Getting ready

Before a review or audit, gather the letter itself, the return or period it refers to, and every slip, receipt, invoice and bank statement that supports the amounts in question. For a business, the general ledger and the HST and payroll filings for the period usually come up. Where records are thin, rebuilding them is bookkeeping work, and our bookkeeping and accounting service is set up for it. Reviews of personal returns often touch on the same items our personal income tax work covers, and business audits frequently involve HST reporting.

Call 905-393-7664 with the letter in front of you, and we can go over what it asks for. Our office hours are Monday to Friday, 10:00 AM to 5:00 PM, and you can also reach us through the contact page.