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.