There is a trend taking place in the last twelve months. The number of CRA reviews that I am dealing with have increased noticeably. Many of these reviews are not for an earth shattering amount of GST or income taxes being reviewed. They are what I would call random audits to see if the taxpayers randomly chosen are being honest and then extrapolate from there.
Many mature businesses have endured this at least once during their life time – a CRA tax audit. Most businesses survive an audit with no issue. This happens when the business has an adequate set of financial records that is easy for the CRA auditor to examine. So what makes up an adequate set of financial records. First of all, the CRA audit has changed from twenty years ago. In the past, an actual person came to the business premise to examine the books and records. Hence if the ... Read More
Increasing Risk of Being Selected for an Audit In our last blog we mentioned that it is no secret that the Canadian government and the CRA have recently been finding new ways to raise revenue. Recent news articles in the Globe and Mail have reported that the CRA has been devoting more resources into uncovering routine common filing errors made by honest taxpayers rather than investing additional resources into uncovering intentional errors. Our recent experience with the CRA confirms this as ... Read More
Self-prepared returns are easy targetsIt is no secret that the Canadian government and the CRA have recently been finding new ways to raise revenue. In recent years, the CRA has devoted more resources towards identifying common filing errors in order to reassess additional taxes, interest and penalties to taxpayers. Statistically, the CRA is aware that tax returns prepared by the taxpayer or unlicensed professional accountants are more likely to contain errors, intentional or ... Read More
The average small business owner in Vancouver has a limited budget to deal with their marketing, accounting, IT and high location rental costs. Successful businesses tend to be surrounded by strong support networks, which include bookkeepers and tax advisors. As a result, their books and records are orderly, current, and their tax filings are consistent with their accounting records. For these businesses, a CRA audit is merely a small project to attend to with the help of a professional ... Read More