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Insurance

What To Do After Getting A CRA Audit Notice

One of the moment Canadians are not looking forward to is receiving a notice from the CRA that they are to be audited. For companies, they rely on protection such as Audit Shield to make sure that they are covered no matter what happens. If you happen to receive a notice from the agency regarding tax audit, do not panic. The first thing you have to remember is to keep calm and make sure you understand how the Canada tax system works.

The tax system of Canada follows the self-assessment concept wherein an individual is required to file a tax return annually in order to determine if you need to pay tax to the government or you will get a refund. According to the government of Canada, this method is not only efficient but also the most economical method.

An audit coming from the CRA does not mean that the person has committed a crime but rather it is the agency’s way of verifying the information provided. They will determine whether the claims are true with the help of supporting documents and receipts.

When you receive a notice from the agency, you have to follow certain rules in order to avoid further trouble. It is expected that you answer the requests by the CRA in a systematic method. A response carried out in the right attitude will help ease the process. Remember to respond as soon as possible.

If there are any misunderstandings, make sure to send the supporting documents and provide the information required to clear things. Do not forget to be respectful at all times, after all the auditors are only doing what they are hired to do. This does not mean that you cannot ask questions because you are encouraged if you are not sure about something.

In case the result is not in your favour or you think it is unfair, send in an appeal within 90 days. To avoid tax troubles, getting protection like Audit Shield can help you avoid the troubles brought about by unexpected audits from the agency.

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Insurance Service Tips

Importance Of Getting Tax Audit Protection Insurance

The most dreaded nightmare for tax payers is getting a scrutiny from the ATO or any other tax collection departments of the state. The ATO can randomly pick up and tax return for scrutiny and investigation even when the accounts are error free and taxes are paid. The process of a tax scrutiny is long and involves a lot of financial loss.

The company or individual needs to hire a lot of professionals to help him sail through the tax audit. Getting the annual cover for audit protection insurance comes handy in such scenario. The insurance cover, which can be bought from the accountant or a tax consultant, will take care of all the expenses involved in facing a tax audit.

An annual audit protection insurance cover will safeguard the accountant and the company from the expenses of tax scrutiny which may run into thousands of dollars. The audit protection cover will pay for the expenses of lawyers, tax accountants and advisors needed to advise you on handling the tax scrutiny and also covers the penalties to be paid because of the mistakes committed by the accountant. However, the insurance cover does not cover the penalties incurred because of intentional fraud and faking expenses to lessen the tax.

The audit protection insurance cover is provided by many tax accountants as part of their value added services to high-end clients, while some of them offer the insurance cover at additional fees. Individuals or companies who pay their own taxes can also buy the audit cover directly from insurance companies, by opting for non accountant version of the product.

The audit protection insurance covers all the tax investigations for the previous year of the date of commencement of the policy and all other previous years. Having a working policy is very important to get proper protection and cover. The accountant should see to it that the annual fee is regularly paid to maintain the policy in a working condition. Choosing proper cover is also very important to get the full protection. The amount of cover should be calculated on the size of the company and the amount of tax return. Be ready to face the tax audit whenever it happens by investing in a tax audit insurance.