An audit notification from the Canada Revenue Agency (CRA) normally comes in the form of a letter. The notification will outline the purpose of the audit, the tax years in question, and the specific areas or reasons of concern. Before responding, it is important to confirm the legitimacy of the notification. To do so, cross-check the contact details with the official CRA website or call the CRA directly.

Respond promptly

It is important not to ignore an audit from the CRA. Instead, you (or an authorized representative) should contact the CRA auditor listed in the letter within the specified timeframe to acknowledge receipt of the audit notice. If you hire a lawyer or an accountant to represent you in an audit, decide who will be the one to communicate with CRA.  It is best to have only one point person. This helps to avoid confusion and delays.

Make sure to ask CRA to clarify any details of the audit that are unclear to you.

Prepare your records

1. Organize all of the documents and records that the CRA has requested, such as:

• Tax returns and supporting documents
• Financial or bank statements
• Receipts, invoices, contracts

2. Review your documents and ensure that they are complete and accurate
3. Be prepares to explain or provide more information for any unusual or complex transactions

Get professional help if needed

Many individuals and businesses choose to hire a tax advisor, accountant, or lawyer to assist them with CRA audits. Professionals can help you review and prepare your documents, represent you with interactions with the CRA, ensure compliance and minimize potential penalties. To get help, ask a lawyer now.

If you choose to hire a representative, authorize them using a Form T1013 (Authorizing or Canceling a Representative).

Cooperate

Whether you are representing yourself in a CRA audit or have hired a professional, cooperating with the CRA helps to speed up the process. It is important to:

• Be transparent and provide complete answers to CRA inquires
• Respond only to the information requested. Do not volunteer additional details unless asked
• Keep a record of all communications and requests from the CRA for your reference

At the same time, it is important that the CRA cooperates with you by:

• Respecting your privacy and only requesting relevant information
• Providing an explanation of why an audit is being conducted and how it will proceed

Get help

For advice and assistance with tax planning, a CRA tax dispute, or other tax issues, contact KPK Law.

Personal and business tax issues are vast and complicated. To get help, ask a lawyer now.

								
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